§ 17-25-403 — Liability of customer

(a) (1) In the event the contractor fails to honor its financial obligations to the State of Arkansas or to any city, county, school district, state agency, or other political subdivision of the state, the customer for whom the work was being performed shall be responsible for all financial obligations of the contractor to the State of Arkansas or to any city, county, school district, state agency, or other political subdivision of the state, on that customer's project, provided that the customer receives written notice of the contractor's failure to comply with this subchapter before final payment to the contractor. (2) The responsibility of the customer shall not exceed any amount owed to the contractor on or after the date the customer receives the written notice. (3) The written notice shall be sent by certified mail, return receipt requested, and must include the maximum amount of all financial obligations the contractor may potentially owe to the State of Arkansas or to any city, county, school district, state agency, or other political subdivision of the state, arising from that customer's project. (b) (1) As used in this section, "financial obligations" includes, but is not limited to, civil penalties imposed by the State of Arkansas or any city, county, school district, state agency, or other political subdivision of the state. (2) Civil penalties imposed pursuant to § 17-25-103(e)(1)(A) and § 17-25-408 for violations of the provisions of this chapter arise from and are connected to the customer's project, and the provisions of this section apply thereto.

Legislative History

Acts 1987, No. 162, § 2; 1989, No. 487, § 2; 1991, No. 783, § 3; 1992 (1st Ex. Sess.), No. 37, § 1; 1999, No. 450, § 1; 2005, No. 187, § 1.