Mechanic’s liens are created by statute to protect the payment rights of parties that furnish labor or materials to a construction project. Not everyone qualifies to be a lienor, and the lien must be perfected in strict accordance with the statutes. Once perfected, though, can a mechanic’s lien be assigned to a third party?
A prime contractor did not file a mechanic’s lien in its own right but took an assignment of the perfected liens of its subcontractors. The project owner argued that the section of the lien statute creating subcontractor rights was for their protection only, not the protection of prime contractors that had let their rights lapse. The contractor responded that nothing in the lien statute prohibited assignment and it had paid the subcontractors in full for their liens. The Rhode Island Supreme Court had to decide.
The second case in this issue involves a series of contract modifications that substantially extended the performance period on a federal contract. The contractor claimed delay costs and argued that the government had acknowledged responsibility for the underlying delay by authorizing the time extension. The government responded that the contractor still had to prove causation and impact to work on the schedule’s critical path.
