9 | Page PAYMENT LETTER Assignment Value: 30 Points Due Date: March 22, 2018 Assignment: Draft no…

9 | Page
PAYMENT LETTER
Assignment Value: 30 Points
Due Date: March 22, 2018
Assignment: Draft no more than a one (1) page letter to Sun Devil Construction, LLC.
Hint:
Your letter must comply in all respects with ARS 32-1129.04. A copy of the statute is included for your
reference.
This assignment is more about your ability to read, comprehend, and comply with the statute. The actual
written portion should be no more than a paragraph or two.
Grading Scale:
30 Points – 0 errors
25 Points – 1 error
20 Points – More than 1 error
Background Information:

You are ABC Concrete, LLC. ABC is a subcontractor to Sun Devil on a project. You submitted a
payment application in the amount of $125,000 on December 1, 2015. It has been more than 60 days
since that the last time you were paid by Sun Devil.
You are not certain but you believe that Sun Devil Construction was paid for your work by the Owner.
Your subcontract requires at least 7 days written notice.
32-1129.04. Construction contracts; suspension of performance; termination
A. A contractor may suspend performance under a construction contract or terminate a construction
contract for failure by the owner to make timely payment of the amount certified and approved pursuant
to section 32-1129.01. A contractor shall provide written notice to the owner at least seven calendar days
before the contractor’s intended suspension or termination unless a shorter notice period is prescribed in
the construction contract between the owner and contractor. A contractor shall not be deemed in breach
of the construction contract for suspending performance or terminating a construction contract pursuant
to this subsection. A construction contract shall not extend the time period for a contractor to suspend
performance or terminate a construction contract under this subsection.
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B. A subcontractor may suspend performance under a construction contract or terminate a construction
contract if the owner fails to make timely payment of amounts certified and approved pursuant to section
32-1129.01 for the subcontractor’s work and the contractor fails to pay the subcontractor for the certified
and approved work. A subcontractor shall provide written notice to the contractor and owner at least
three calendar days before the subcontractor’s intended suspension or termination unless a shorter notice
period is prescribed in the construction contract between the contractor and subcontractor.

A subcance or
terminating a construction contract pursuant to this subsection. A construction contract shall not extend
the time period for a subcontractor to suspend performance or terminate a construction contract under
this subsection.
C. A subcontractor may suspend performance under a construction contract or terminate a construction
contract if the owner makes timely payment of amounts certified and approved pursuant to section 32-
1129.01 for the subcontractor’s work but the contractor fails to pay the subcontractor for the certified
and approved work. A subcontractor shall provide written notice to the contractor and owner at least
seven calendar days before the subcontractor’s intended suspension or termination unless a shorter notice
period is prescribed in the construction contract between the contractor and subcontractor. A
subcontractor shall not be deemed in breach of a construction contract for suspending performance or
terminating a construction contract pursuant to this subsection. A construction contract shall not extend
the time period for a subcontractor to suspend performance or terminate a construction contract under
this subsection.
D. A subcontractor may suspend performance under a construction contract or terminate a construction
contract if the owner declines to approve and certify portions of the contractor’s billing or estimate
pursuant to section 32-1129.01 for that subcontractor’s work but the reasons for that failure by the owner
to approve and certify are not the fault of or directly related to the subcontractor’s work. A subcontractor
shall provide written notice to the contractor and the owner at least seven calendar days before the
subcontractor’s intended suspension or termination unless a shorter notice period is prescribed in the
construction contract between the contractor and subcontractor. A subcontractor shall not be deemed in
breach of a construction contract for suspending performance or terminating a construction contract
pursuant to this subsection. A construction contract shall not extend the time period for a subcontractor
to suspend performance or terminate a construction contract under this subsection.
E. A contractor or subcontractor that suspends performance as provided in this section is not required to
furnish further labor, materials or services until the contractor or subcontractor is paid the amount that
was certified and approved, together with any costs incurred for mobilization resulting from the
shutdown or start-up of a project.
F. In any action or arbitration brought pursuant to this section, the successful party shall be awarded
costs and attorney fees in a reasonable amount.
G. Written notice required under this section shall be deemed to have been provided if either of the
following occurs:
1. The written notice is delivered in person to the individual or a member of the entity or to an officer of
the corporation for which it was intended.
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2. The written notice is delivered at or sent by any means that provides written, third party verification
of delivery to the last business address known to the party giving notice.

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