S.B. 73 Enrolled

CONTRACTOR'S DUTIES TO SUBCONTRACTORS
1997 GENERAL SESSION
STATE OF UTAH
Sponsor: L. Alma Mansell
AN ACT RELATING TO COMMERCE; ADDRESSING PAYMENT OBLIGATIONS UNDER
CONSTRUCTION CONTRACTS REGULATING CONTRACTS BETWEEN
CONTRACTORS AND SUBCONTRACTORS; AND PROVIDING SCOPE OF
SECTION.
This act affects sections of Utah Code Annotated 1953 as follows:
ENACTS:
13-8-3, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 13-8-3 is enacted to read:
13-8-3. Obligation to pay under construction contracts -- Rights of parties under
contingent payment provisions.
(1) For purposes of this section:
(a) "Construction contract" means a contract or agreement to provide services, labor, or
materials for the design, construction, installation, or repair of an improvement to real property
located in Utah.
(b) "Contingent payment contract" means a construction contract between a contractor and
a subcontractor that makes a payment from the contractor to the subcontractor contingent on the
contractor receiving a corresponding payment from any other public or private party, including a
private owner.
(c) "Contractor" means a person who is or may be awarded a contract for the construction,
alteration, or repair of any building, structure, or improvement to real property.
(d) "Subcontractor" means any person engaged by a contractor to provide services, labor,
or materials for the design, construction, installation, or repair of an improvement to real property
and includes a trade contractor or specialty contractor.
(2) A party to a construction contract shall make all scheduled payments under the terms

of the construction contract.
(3) (a) The existence of a contingent payment contract is not a defense to a claim to enforce
a mechanics' lien filed under Title 38, Chapter 1, Mechanics' Liens.
(b) Subsection (3) does not apply to contracts for private construction work for the building,
improvement, repair, or remodeling of residential property consisting of four units or less.
(4) If a construction contract is a contingent payment contract:
(a) the subcontractor may request from the contractor the financial information that the
contractor has received from the public or private party regarding:
(i) the project financing; and
(ii) the public or private party; and
(b) if information is requested by the subcontractor under Subsection (4)(a), the contractor
shall provide the information prior to the subcontractor signing the construction contract between
the contractor and the subcontractor.
(5) This section applies to a contract executed on or after May 5, 1997.

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