Supliers not paid by subcontractor. How can Prime contractor pay the material supplier directly.
Hello,
The Prime contractor can go directly to the supplier, if known, and offer to settle up the account for certain materials or a certain project (It will depend on how far behind the subcontractor is running on payments and whether they can identify the amount solely related to the Prime's project).
I have done it before. Believe me when I say the supply houses are more than open to taking money to settle up a delinquent customer's account. The ones I've dealt with really don't care where the money comes from.
E. Aaron Cartwright III
214.789.1354
Aaron@EACLawyer.com
Hello,
Chapter 53 of the Texas Property Code allows for suppliers to place liens on the project property if they are not paid. You obviously have a duty to make sure your client property is not liened if it can be avoided. And, under contract law, the supplier may be a third party beneficiary (maybe?). You have a semi contractual duty to make sure they're paid.
Also, check what I am sure is a written contract between the two of you that spells out him having the responsibility to pay his suppliers or you will pay them and withhold the money from his pay. This clause exists in your contract which also exists, right?!
Plus, any contract between the Prime and the Owner should probably have language about the Prime ensuring the project is free of liens or the Prime will be deemed to have breached the contract.
Just my thoughts. In any event, he's not likely to succeed in a breach of contract action against you if you go around him and pay his unpaid suppliers. He has to have suffered harm to succeed and he suffers no harm when you pay the people he should have.
-Aaron
This is something that is typically covered in the subcontract. Normally, there is a clause that requires the subcontractor to pay its suppliers from funds it receives from the general contractor and to remove any liens from the property that result from the subcontractor's nonpayment. The clause also typically grants the general contractor the right to pay the suppliers directly if the subcontractor fails to pay. So check your contract first. If that does not answer your question, you should discuss this with an attorney.