Nevada Construction Contracts Guide & FAQs

No, “no-lien clauses” are void and unenforceable in Nevada. This is expressly prohibited under NRS §108.2453(2), which states:

A condition, stipulation or provision in a contract or other agreement for the improvement of property or for the construction, alteration or repair of a work of improvement in this State that attempts to do any of the following is contrary to public policy and is void and unenforceable: (a) Require a lien claimant to waive rights provided by law to lien claimants or to limit the rights provided to lien claimants, other than as expressly provided in NRS 108.221 to 108.246, inclusive

Pay-if-Paid Clauses

Yes, pay-if-paid clauses are enforceable under Nevada law, but only in extremely limited circumstances. However, what constitutes such “limited circumstances” is still a topic of debate. In 2008, the Nevada Supreme Court held that pay-if-paid provisions were unenforceable as a matter of public policy favoring the right to a mechanics lien.

But, in 2020, the courts switched gears a bit. In APCO v. Zitting Bros., the court held that pay-if-paid clauses weren’t per se unenforceable. Rather, the court should determine the enforceability on a case-by-case basis to assess whether the clause is permissible under the Nevada Prompt Pay Acts.

“… such provisions require a case-by-case analysis to determine whether they are permissible under NRS 624.628(3), and we hold that they are unenforceable if they require any subcontractor to waive or limit its rights provided under NRS 624.624 -.630, relieve general contractors of their obligations or liabilities under NRS 624.624 -.630, or require subcontractors to waive their rights to damages or time extensions.”

Pay-when-Paid Clauses

Nevada courts have yet to deal directly with the issue of the validity of pay-when-paid clauses. Given that a pay-if-paid clause may be enforceable under limited circumstances, they likely are enforceable as setting a reasonable time for payment.

Yes, no-damages-for-delay clauses are enforceable in Nevada. However, there are certain exceptions that will defeat a defense based on a no-damages-for-delay provision. These exceptions, outlined in JA Jones Constr. Co. v. Lehrer McGovern Bovis, Inc., include:

• Delays so unreasonable in length as to amount to project abandonment;
• Delays caused by the other party’s fraud, misrepresentation, concealment, or other bad faith; &
• Delays caused by the other party’s active interference.

Private Projects

Yes, under Nevada’s prompt payment laws for private projects all progress payment timings may be modified to some extent by the terms of the contract. Payments to prime contractors must be made according to the terms of the contract, if the contract is silent regarding a payment schedule, then the prompt payment laws kick in.

As far as all other down chain payments, they must be made according to the payment schedule in the contract, or within 10 days of receipt of payment by the hiring party; whichever is earlier. However, if the contract is silent, then the prompt pay provisions apply.

Public Projects

Under Nevada’s public prompt payment laws, payments to the prime contractor may be modified by the contract, but only to shorten the time for payment. The time for payment cannot be extended beyond the 30 days from billing under the Nevada public prompt payment laws. All other payments on the project must be made within 10 days after the higher-tiered party received payment.

No, the amount of retainage in Nevada that can be withheld on both private and public construction projects is firmly capped at 5% of each progress payment.

Granted, on public projects, retainage can be reduced or eliminated from remaining payments upon reaching the 50% completion point, but this is available only upon the public entity’s determination that satisfactory progress is being made.

Generally speaking, construction contracts in Nevada do not have any specifically required information that must be included. However, when it comes to contracts involving single-family, residential property; the prime contractor must include or otherwise provide certain information and disclosures. Such contracts must include:

• Contractor’s license number;
• Disclosure informing the owner of Nevada lien rights;
• Disclosure informing the owner of the licensing requirements of the Nevada  State Contractors Licensing Board;
• Notice regarding the Nevada Residential Recovery Fund; &
• GC must also provide a list of the names and license numbers of any subs or suppliers that will provide $500 or more worth of labor and/or materials to the projects; and a statement that if unpaid, they have the right to file a lien against the property.

In addition to these requirements, if the contract is for the installation or repair of a pool or spa on a single-family residential property, there is a long list of required information that must be included found under NRS §624.940.

The statute of limitations (deadline) to file a breach of contract claim for nonpayment in Nevada varies depending on whether the contract was written/express or oral/implied.

Breach of written contract claims must be brought within 6 years from the date of the breach (NRS §11.190(1)(b)). While claims for breach of an oral contract must be brought within 4 years from the date of the breach (NRS §11.90(2)(c)).