Legal Question in Business Law in Idaho

Time limits on Subcontractor payments

If a subcontractor does installations of satellite equipment for a company, how much time can the company hold payment when the following applies:

1. Payments to Dealer paragraph states - Payments to dealer will be made when company is paid by Satellite Company. "...We are working to expidite process with

_ _ _ _ _ _, but that process may take 30 days in the current program..."

2. Work was completed 75 days ago with no payment to date.

3. All equipment used in installations was purchased by dealer from company.

4. Work orders were faxed to dealer by company.


Asked on 1/12/00, 11:03 am

1 Answer from Attorneys

Jeffery Hess Hawkins-Smith

Re: Time limits on Subcontractor payments

This is more of a business question than a legal one; however, there are a couple of points. But first you don't say if you are the contracter for a buyer of a system and you are having a subcontracter actually do the installation. It seems as though the "Sattelite Company" is giving you the order to install and it is collecting the money from the customer who is ending up with the equipment. 1. The 75 days that it takes to get payment from "Sattelite Company" seems long and it is obviously causing you problems with a subcontractor. 2. The bill you send to the Sattelite Company should have a way to identify the place that the system was installed. 3. The payment from the Satelite Company should identify the place that the system they are paying for was installed. This allows for the tracking of the money and when you actually recieve the money for a particuler job and thus when you are obligated to pay. The contract seems clear that when you get the money you owe it to the sub. But if all the money from the Satelite Company is comingled. How would anyone be able to tell when payment is due. Therefore if there is no direct way of telling then a court would look to payment to be made in a reasonable time, 30, maybe 60 days. You must always be aware that a sub can file a lein against the owners property if they are not paid within the time limits of their lein rights.

Again, this seems like a business relationship issue rather than legal.

This answer is not intended to be for representation purposes and may not be used as such. To get specific advice for this question you need to consult counsel so that they may look at all the facts.

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Answered on 1/21/00, 9:15 am


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