“I recently received a call from a general contractor and client with an all-too-common question: “I just had a subcontractor show up on site and tell me, ‘I’m going out of business and won’t finish the job.’ What do I do?”
Like death and taxes, another “sure thing” in the life of a general contractor is that at some point, a subcontractor will go bad. Luckily for the general contractor in this case, he had planned ahead.
By planning ahead, I mean the general contractor had in place a solid written subcontract agreement, which allowed the general to take immediate action to terminate the subcontractor, secure the work in progress and replace the subcontractor. The subcontract also required timely lien waivers and releases, so there was no risk of being stuck paying twice for the same work already done.”