Top 10 Construction Law Statutes in Minnesota

Top 10 Construction Law Statutes in Minnesota

September 1, 2003

By Dean B. Thomson

We are often asked for a list of the most important statutes relating to construction or for citations to these statutes. Therefore, this month’s Briefing Paper provides a brief discussion of and citations to the most important statutes relevant to construction. For a more detailed description of any particular statute, do not hesitate to contact us.

1.  Mechanic’s Liens. Minn. Stat. §§ 514.01-514.17 (liens must be filed within 120 days after doing last work; lien foreclosure actions must be brought within one year after last day of work).

2.  Payment Bonds. Minn. Stat. §§ 574.26-574.32 (claims against a bond on state projects must be filed within 120 days of last work); Miller Act, 40 U.S.C. § 270a-f (on federal projects, bond claims must be filed within 90 days of last work).

3.  Prevailing Wages. Minn. Stat. §§ 177.42-177.44 (prevailing wages are payable on state-funded contracts; a contractor may be liable if a subcontractor fails to pay them; new rules at Minn. R. 5200.1105-06 explain what prevailing wages are due for trucking to and from job sites).

4.  Progress Payments and Retainages. Minn. Stat. § 337.10, subd. 4 (private contracts – monthly progress payments are required unless contract provides otherwise); Minn. Stat. § 15.72 (public contracts – monthly payments required unless contract says otherwise); Minn. Stat. § 15.73 (security in lieu of retainage – contractor may deposit bonds or securities on public projects and collect interest on the deposit instead of having public agency hold retainage).

5.  Prompt Payments. Minn. Stat. § 337.10, subd. 3 (private contracts – contractors must pay subcontractors for undisputed services within ten days after receipt of payment; contractors who fail to do so may be liable for 18% interest and attorney’s fees); Minn. Stat. § 471.425, subd. 4a (municipalities must pay undisputed amounts to vendors within 35 days (or 45 days for some municipalities) or may be liable for 18% interest and attorney’s fees); Minn. Stat. § 16A.1245 (same for state agency contracts); Minn. Stat. § 137.36 (same for university contracts).

6.  Statutes of Limitation. Minn. Stat. § 541.051 (general – two years after discovery of injury or accrual of cause of action, and no more than 10 years after substantial completion); Minn. Stat. § 3.751, subd. 5 (most state agency contracts – 90 days after the state furnishes the contractor with a final estimate under the contract); Minn. Stat. § 161.34, subd. 2 (state trunk highway projects – 90 days after state furnishes final estimate, or, at the contractor’s election, six months after the contract work has “been in all things completed”).

7.  Competitive Bidding. Over 30 Minnesota statutory provisions, e.g. Minn. Stat. § 471.345 (cities, towns, and counties – contracts over $35,000 for municipalities of less than 2,500 population, and $50,000 for all others, must be competitively bid), Minn. Stat. § 161.32 (Minnesota Department of Transportation – contracts over $150,000 must be competitively bid); 41 U.S.C. §§ 253 et seq. (federal contracts must be competitively bid).

8.  Indemnity Agreements, Anti-Indemnity Contracts, and Agreements to Insure. Minn. Stat. §§ 337.01-337.05 (indemni-fication agreements are unenforceable except as to negligent or otherwise wrongful acts, or in connection with certain environmental laws, but agreements to insure are generally valid and enforceable).

9.  Application of Laws of Other States. Minn. Stat. § 337.10, subd. 1 (provisions subjecting a contract to the laws of another state, or requiring litigation or arbitration to be held in another state, are invalid).

10. Anti-Waiver Agreements. Minn. Stat. § 337.10, subd. 2 (provisions requiring waiver of rights to mechanic’s liens or payment bond claims before payment are invalid).

This discussion is generalized in nature and should not be considered a substitute for professional advice. © FWH&T