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Home>Levelset Community>Legal Help>We are the sub-contractor on a project not the General Contractor. However, when a supplier asked us to fill out preliminary information, our office manager inadvertently listed us as the General Contractor. Is the supplier now able to hold us liable as the GC?m

We are the sub-contractor on a project not the General Contractor. However, when a supplier asked us to fill out preliminary information, our office manager inadvertently listed us as the General Contractor. Is the supplier now able to hold us liable as the GC?m

CaliforniaStop Notice

The supplier has filed a stop notice on the project, and listed us as the General Contractor. They are insisting that we are now liable even though we are a subcontractor not the general contractor

1 reply

Feb 28, 2019
That's an interesting situation. First, it's worth mentioning that when a stop notice is filed on a project, that stop notice creates a situation where the owner or lender must withhold funds. A stop notice does not make the general contractor liable for payment, in and of itself. Further, it does not appear that, under the California Civil Code, a subcontractor is statutorily required to provide prelim information to their subcontractors and suppliers. Under § 8208 of the California Civil Code, a direct contractor must provide that information to anyone who wishes to send preliminary notice, but a subcontractor is not required to provide it. Granted, sharing information (and accurate information, to boot) is a great way to establish collaboration and transparency among project participants, and the exchange of accurate information can even help to prevent payment disputes. But, by the text of the California Civil Code itself, it does not appear that a subcontractor providing inaccurate info to their supplier would automatically open up a subcontractor to liability as if the subcontractor was the GC of the project - and even if that were the case, a stop payment notice freezes funds at the owner or lender level. Granted, that doesn't mean that a supplier might not attempt to take some other legal or equitable action in attempt to hold a subcontractor liable for payment issues - and such an action could even be successful. So, in the event that a vendor has gone unpaid and wants to hold their customer liable for that nonpayment, one approach that might help ease a payment dispute could be to work with that vendor to try and work together to compel payment from whichever higher-tiered party or parties are ultimately responsible for nonpayment.
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