16-1803.   Private construction contracts; paymentprovisions; provisions against public policy, void, unenforceable; failure topay.(a) Subject to the provisions of subsections (b), (c), (d), (e),(f), (g) and (h) andK.S.A.16-1804 and 16-1805,and amendments thereto, all persons who enter into a contract for privateconstruction after theeffective date of this act,shall make all payments pursuant to the terms of the contract.

      (b)   The following provisions in a contract for private construction shall beagainst public policyand shall be void and unenforceable:

      (1)   A provision that purports to waive, release or extinguish the right toresolve disputes throughlitigation in court or substantive or procedural rights in connection with suchlitigation except that a contract may require binding arbitration as asubstitute forlitigation or requirenon-binding alternative dispute resolution as a prerequisite to litigation;

      (2)   a provision that purports to waive, release or extinguish rights providedby article 11 of chapter 60 of the Kansas Statutes Annotated,and amendments thereto, except that a contract may require a contractor orsubcontractor to providea waiver or release of such rights as a condition for payment, but only to theextent of the amount of payment received; and

      (3)   a provision that purports to waive, release or extinguish rights ofsubrogation for losses orclaims covered or paid by liability or workers compensation insurance exceptthat acontract may require waiver of subrogation for losses or claims paid by aconsolidated or wrap-up insurance program, owners and contractors protectiveliability insurance, orprojectmanagement protective liability insurance, unless otherwise prohibited undersubsection (b)(5) of K.S.A. 2009 Supp. 40-5403, and amendments thereto.

      (c)   Any provision in a contract for private construction providing that apayment from a contractor or subcontractor to a subcontractoris contingent or conditionedupon receipt of apayment from any other private party, including a private owner, is no defenseto a claim toenforce a mechanic's lien or bond to secure payment of claims pursuant to theprovisions of article 11 of chapter60 of the Kansas Statutes Annotated, andamendments thereto.

      (d)   All contracts for private construction shall provide that payment ofamounts due a contractorfrom an owner, except retainage, shall be made within 30 days after the ownerreceives a timely,properly completed, undisputed request for payment.

      (e)   If the owner fails to pay a contractor within 30 days following receiptof a timely, properlycompleted, undisputed request for payment, the owner shall pay interest to thecontractorbeginning on the thirty-first day after receipt of the request for payment,computed at the rate of 18% per annum on the undisputed amount.

      (f)   A contractor shall pay its subcontractors any amounts due within sevenbusiness days of receiptof payment from the owner, including payment of retainage, if retainage isreleased by the owner,if the subcontractor has provided a timely, properly completed and undisputedrequest forpayment to the contractor.

      (g)   If the contractor fails to pay a subcontractor within seven businessdays,the contractor shall payinterest to the subcontractor beginning on the eighth business day afterreceiptof payment by thecontractor, computed at the rate of 18% per annum on the undisputed amount.

      (h)   The provisions of subsections (f) and (g) shall apply to allpayments from subcontractorsto their subcontractors.

      History:   L. 2005, ch. 156, § 3;L. 2009, ch. 136, § 6; July 1.