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Am I a general contractor or materials supplier?

MichiganConstruction Contract
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Anonymous contractor
Oct 8, 2020

Generally, we are a subcontractor for commercial projects. However, we also have a large book of residential business in which a homeowner will work directly with us to accomplish a flooring project. Furthermore, all of our own labor is subcontracted. So, in this case are we considered a General or Materials Supplier?

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Anonymous contractor
Oct 8, 2020
Generally speaking, a "material supplier" is someone who furnishes material or equipment to a project, and nothing else. They do not enter into a "contracting" agreement. They enter into an agreement to "supply." Their obligations on the project is simple...to supply the materials that are ordered. That's it. Now, if there are other obligations, such as management, organization, providing labor, hiring other contractors and/or subcontractors to perform work, to be responsible for the project's workmanship, etc., etc. -- anything else -- then you would be a "contractor." There are multiple types of contractors, but generally speaking, they boil down to this: General Contractor: This is the non-supplier person or company who contracts with the property owner/developer to perform the work. Subcontractor: Subcontractors are non-supplier people or companies who contract with the General Contractor. Sub-Subcontractor; These are non-supplier people or companies who contract with subcontractors. Suppliers: Suppliers are suppliers regardless of who they contract with. They are a supplier if their only obligation is to provide supplies as ordered. Based on your question, it SOUNDS like you are a general contractor. You are contracting with subcontractors to perform the work, and are obligated to the homeowner for the work itself. That would make you the general contractor.
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Anonymous contractor
Oct 12, 2020

From the facts you've presented, I think you are a contractor, not a supplier. 

The Michigan Construction Lien Act includes these defined terms:  

- “Contractor” means a person who, pursuant to a contract with the owner or lessee of real property, provides an improvement to real property. MCL 570.1103(5)

- "Improvement" means the result of labor or material provided by a contractor, subcontractor, supplier, or laborer, including, but not limited to, surveying, engineering and architectural planning, construction
management, clearing, demolishing, excavating, filling, building, erecting, constructing, altering, repairing,
ornamenting, landscaping, paving, leasing equipment, or installing or affixing a fixture or material, pursuant to a contract. MCL 570.1104(5)

- "Supplier" means a person who, pursuant to a contract with a contractor or a subcontractor, leases,
rents, or in any other manner provides material or equipment that is used in the improvement of real property. MCL 570.1106(5)

If you are contracting with the Owner of the property to furnish and install the flooring, whether you are self-performing the installation or subcontracting it, I think you're a contractor. That means you should also make sure you have a builder's license. 

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Anonymous contractor
Oct 17, 2020

Your status as GC or a sub should be stated in your contract with the owner. If your contract says you're the GC with the right to control means and methods and direct the work of the other project stakeholders, then you're the GC. If another project stakeholder has the right to control your work, you're a sub. On occasion, subs contract directly with owners but are still subject to the GC's direction.

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