five (5) new changes in Ohio law, affect all public and private construction
contracts and work. These enactments, under House Bill 71, were signed
by Governor Voinovich on 7/1/98, and effective September 29, 1998. These
new laws were made to amend Section 153.56 R.C. and to enact Section 4113.62
R.C. to void various types of provisions of construction contracts or
subcontracts considered to be against public policy and to establish new
requirements and limitations relative to exercising rights under a payment
bond for certain public improvements. The five significant changes include:
1. PUBLIC WORK; MILLER ACT; NOTICE OF FURNISHING REQUIRED.
Under amended 153.56 R.C., a subcontractor or materials supplier supplying
labor or materials that cost more than $30,000.00, who is not in direct
privity of contract with the principal contractor for the public improvement,
must now serve a Notice of Furnishing upon the principal contractor, within
21 days after the first work or materials supplied to the project.
If this contractor fails to comply, he has no claim against the principal
contractor’s surety bond. If the Notice of Furnishing is served
after the 21 day period, the contractor has a right of recovery only to
the amounts owed for labor and work performed and materials furnished,
during the 21 days prior to serving the Notice of Furnishing.
Under the new Section 4113.62 R.C., various provisions in construction
contracts are declared void as against public policy. These include:
2. WAIVER OF SURETY BOND; RIGHTS, VOID. Any provision
in a construction contract that waives rights under a surety bond is void
3. CONTRACTS; "NO DAMAGE FOR DELAY" clauses
void, where delay caused by Owner. Clauses providing "no
damages for delay" in contracts between the owner and principal contractor
are void, if the delay is one proximately caused by the owner’s
act or failure to act.
4. SUBCONTRACTS; "NO DAMAGE FOR DELAY" clauses void,
where delay caused by Owner, or Contractor. Similarly, clauses providing
"no damages for delay" in subcontract agreements are also void
if the delay is the proximate result of the owner’s or (upper tier)
contractor’s act or failure to act.
5. MECHANICS’ LIEN RIGHTS; RESTRICTIONS PROHIBITED.
Finally, contracts making payment contingent or conditioned upon receipt
of payment from any other person or entity (e.g. "pay if paid"
or "pay when paid" clauses) may not prohibit filing a claim
to protect rights under the Ohio Little Miller Act or Mechanics’
With the effective date of these new provisions just ahead, additional
care must now be taken to review and revise all existing construction
contracts and to implement conformity and consistency with the new Ohio
* * *
Author: J. NORMAN STARK is an Attorney-at-Law,
a Registered Architect, (AIA, NCARB) Registered Landscape Architect, Interior
Designer, Planner and Senior Appraiser (ASA), admitted to practice law before
the Bar of Ohio, the US District Courts, Ohio and Illinois (Central Dist.),
the US Court of Appeals, and the United States Supreme Court. He has had
experience in business, Construction, Real Property, Litigation and Construction-Legal
Project and Crisis Management.