By: Scott T. Earle House Bill 109 (HB 109), which was passed by the House of Representatives, has stalled out in the Senate. This Bill was a proposed amendment to Title 6, Chapter 35 of the Delaware Code Building and Construction Payments section (the Act).
What Would HB 109 Have Changed?
HB 109 would have changed the name of the Act to the “Building Construction Procedures Act” and expanded the scope of the Act to apply to all forms of construction, not just construction related to buildings or structures. The amendment would have also made it against public policy to apply any other law but Delaware law to construction contracts performed in the state. It also would have required an in-state contractor to participate in any legal proceedings inside the State of Delaware. Additionally, HB 109 would have consolidated and amended the contract clauses currently contained in Sections 3506 and 3507 into one section to harmonize the timing of events set forth in these Sections, which are presently inconsistent. Finally, the amendment would have also changed the time in which a contractor or subcontractor has to dispute an invoice from 7 days to 15 days.
Next Steps for HB 109
HB 109 was passed by the House on June 22, 2011 and received no opposition. The amendment was passed with forty out of a possible forty-one votes in its favor. After being passed by the House, the amendment was introduced to the Senate on June 23, 2011 where it stalled out in the Executive Committee and expired when the General Assembly recessed on June 30, 2011. HB 109 is anticipated to be reintroduced next January when the General Assembly reconvenes. We will monitor HB 109 and update you when the General Assembly reviews the legislation. Scott T. Earle is a Senior Associate with Cohen Seglias and a member of the Business Transactions Group.