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Subcontractors: Have Lien Waivers, Insurance Certificates On Hand In Case Of Dispute

Tuesday, September 04, 2007 12:42 pm


AWisconsin court affirmed a judgment allowing a contractor to withhold funds set aside for pending vendor claims where the contract explicitly authorized the contractor to do so. The subcontractor's failure to complete work triggered a warning notice and, ultimately, termination.

The Milwaukee Metropolitan Sewerage District (the district) contracted with Kenny Construction Company (Kenny) to work on a street rehabilitation project. Kenny subcontracted with Dionne Construction and Traffic Company (Dionne) to rehabilitate approximately 52 manholes pursuant to the project. Dionne agreed to prepare, coat and seal each manhole to the satisfaction of the district in return for payment.

By the subcontract's terms, Kenny could terminate the subcontract if Dionne "defaulted in the performance of any its conditions." If Dionne failed to perform, the contract authorized Kenny to "retain out of any monies . . . due the Sub-contractor a sum sufficient to pa [...]

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