2015 ORS 701.635¹
Suspension of performance

(1) An original contractor may suspend performance under a construction contract, or if performance is suspended for longer than one month may terminate a construction contract, if the owner fails to make timely payment of the amount certified under ORS 701.625 (Progress payments). An original contractor shall provide written notice to an owner at least seven days before the original contractor suspends performance or terminates the construction contract, unless a shorter notice period is prescribed in the construction contract. An original contractor may not be deemed in breach of a construction contract for suspending performance or terminating a construction contract pursuant to this subsection. A construction contract may not extend the notice period under this subsection.

(2) A subcontractor may suspend performance under a construction contract, or if performance is suspended for longer than one month may terminate a construction contract, if the owner fails to make timely payment of amounts certified under ORS 701.625 (Progress payments) or the subcontractor does not receive payment for the certified work under ORS 701.630 (Payments to subcontractors and material suppliers) (2). A subcontractor shall provide written notice to the original contractor and owner at least three days before the subcontractor suspends performance or terminates the construction contract, unless a shorter notice period is prescribed in the construction contract. A subcontractor may not be deemed in breach of a construction contract for suspending performance or terminating a construction contract pursuant to this subsection. A construction contract may not extend the notice period under this subsection.

(3) A subcontractor may suspend performance under a construction contract, or if performance is suspended for longer than one month may terminate a construction contract, if the owner makes timely payment of amounts certified under ORS 701.625 (Progress payments) for the subcontractor’s work but the original contractor fails to pay the subcontractor for the certified work. A subcontractor shall provide written notice to the original contractor and owner at least seven days before the subcontractor suspends performance or terminates the construction contract, unless a shorter notice period is prescribed in the construction contract. A subcontractor may not be deemed in breach of a construction contract for suspending performance or terminating a construction contract pursuant to this subsection. A construction contract may not extend the notice period under this subsection.

(4) A subcontractor may suspend performance under a construction contract, or if performance is suspended for longer than one month may terminate a construction contract, if the owner declines or fails to approve portions of the contractor’s billing or estimate under ORS 701.625 (Progress payments) for that subcontractor’s work and the reasons for nonapproval are not the fault of or directly related to the subcontractor’s work. A subcontractor shall provide written notice to the original contractor and the owner at least seven days before the subcontractor suspends performance or terminates the construction contract, unless a shorter notice period is prescribed in the construction contract. A subcontractor may not be deemed in breach of a construction contract for suspending performance or terminating a construction contract pursuant to this subsection. A construction contract may not extend the notice period under this subsection.

(5) A contractor or subcontractor may not submit a notice of suspension under this section until the lawful period for payment to the contractor or subcontractor has expired.

(6) An original contractor or subcontractor that suspends performance as provided in this section may condition the supplying of further labor, equipment, services, materials or products upon the owner or original contractor paying, in addition to any amounts certified under ORS 701.625 (Progress payments), any documented, substantial and reasonably incurred costs for mobilization resulting from the shutdown or start-up of a project.

(7) In any action, claim or arbitration brought pursuant to this section, the prevailing party shall be awarded costs and reasonable attorney fees.

(8) Written notice required under this section is deemed to have been provided if the notice:

(a) Is delivered in person to the owner, original contractor, subcontractor or a person designated by the owner, original contractor or subcontractor to receive notice; or

(b) Is delivered by certified mail, return receipt requested, or other means that provides written, third party verification of delivery to the last business address of the owner, original contractor or subcontractor known to the party giving notice. [2003 c.675 §57; 2011 c.553 §4]

Note: See note under 701.620 (Definitions for ORS 701.620 to 701.640).

Chapter 701

Notes of Decisions

This is a remedial statute made for the protec­tion of the building business and of people dealing with builders who might be irresponsible; it should be read as a whole and liberally construed to accomplish its purpose. Robinson v. Builders Bd., 20 Or App 340, 531 P2d 752 (1975)

Atty. Gen. Opinions

Lack of authority for director to appoint executive secretary for board, (1971) Vol 35, p 930; inap­pli­ca­bil­i­ty of this chapter to business of construc­tion or installa­tion of fences, sidewalks, septic tanks, wells and underground sprinkling systems, (1972) Vol 35, p 1278; mobile home as per­sonal or real prop­erty under this chapter, (1972) Vol 36, p 41; applica­tion of Homebuilders Law to mobile homes, (1978) Vol 38, p 693


1 Legislative Counsel Committee, CHAPTER 701—Construction Contractors and Contracts, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors701.­html (2015) (last ac­cessed Jul. 16, 2016).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2015, Chapter 701, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano701.­html (2015) (last ac­cessed Jul. 16, 2016).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.