A Contract Provision Waiving a Subcontractor’s Rights to Make Bond Claims is Void by Drew W. Colby

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In Costa v. Brait Builders Corporation, the highest Court in Massachusetts addressed the question of whether a contract term is void because it precluded a Subcontractor from bringing a payment bond claim on a public project. The Court declared the contract term void and, thus, allowed the Subcontractor to pursue its bond claim. The Court also addressed another contract term concerning the award of attorneys’ fees to the prevailing party that provides guidance to all parties negotiating such terms.

Brait Builders Corporation (“Brait”) included a term in its subcontract that sought to waive the Subcontractor’s right to make a payment bond claim against Brait if the Subcontractor did not provide its own payment and performance bonds (ostensibly for Brait to make claims should the Subcontractor default). The Subcontractor did not provide those bonds, but nevertheless brought a payment bond claim against Brait. Brait moved to dismiss the bond claim reasoning the contract term precluded such claims. The Subcontractor, on the other hand, argued the contract term was void because it violated public policy.

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