Establishes rules to govern contracts between contractors, subcontractors, and other parties to construction contracts
HB1089 creates a new section of Missouri law governing construction contracts and payment practices across the construction chain. It defines key terms such as owner, contractor, subcontractor, pay application, and work, and then sets default rules that cannot be waived or reduced by contract. The bill is aimed at preventing unfair payment terms and ensuring that parties performing construction work are paid in a timely manner.
The bill prohibits a range of contract provisions in construction agreements, including clauses that allow withholding payment beyond the disputed amount, require continued work without payment, force waiver of rights as a condition of payment, impose out-of-state law or dispute resolution, or make payment from an upstream party a condition precedent to payment downstream. It also requires owners to pay contractors within 40 days after receipt of an invoice or pay application for satisfactorily completed work, and requires contractors to pay subcontractors within 7 days after receiving payment from the owner for that subcontractor’s work. Similar flow-down rights and obligations apply to sub-subcontractors and suppliers at lower tiers.
The bill also establishes notice requirements for withholding payment based on materially noncompliant work. Owners must provide written notice within 15 days, identify the amount withheld, the specific reasons, the responsible party or trade, and the portion attributable to each responsible party. Contractors must pass that notice down to affected subcontractors within 7 days. Failure to give the required notice generally results in deemed acceptance of the invoice or pay application, subject to a later claim for undiscoverable noncompliant work.
HB1089 would significantly affect Missouri construction law by overriding contrary contract language and making its payment protections mandatory for most commercial construction contracts entered into after August 28, 2025. It excludes repair, remodeling, or additions to owner-occupied residential property of four units or fewer when the owner occupies or intends to occupy the property. The practical effect is to strengthen payment certainty for contractors, subcontractors, and suppliers while limiting owners’ and upstream contractors’ ability to use broad withholding or backcharge provisions.
No committee transcripts or recorded votes were provided, so there is no documented debate or vote history to gauge legislative sentiment. Based on the bill text alone, the measure appears pro-contractor and pro-subcontractor, with its main policy focus on prompt payment and anti-waiver protections. The likely point of contention is the bill’s restriction on owners’ and contractors’ ability to withhold payment, suspend work, or use certain contract terms to manage disputes, which may be viewed as reducing leverage for project owners and general contractors.
HB1089 would add section 436.302 to Chapter 436, Missouri’s statutes governing construction contracts, and would make its provisions nonwaivable and enforceable as a matter of public policy. It would invalidate specified contract clauses in construction agreements, require prompt payment timelines at each tier of the project, impose notice requirements for withholding payment, and extend similar rights and responsibilities down the contracting chain. The bill would apply only to construction contracts entered into after August 28, 2025, and would not apply to certain owner-occupied residential projects.
No votes or committee discussion were provided, so there is no recorded legislative sentiment to summarize from debate or roll call. From the text, the bill is clearly designed to protect contractors, subcontractors, and suppliers from delayed payment and coercive contract terms, suggesting support from construction trade interests and parties seeking prompt-payment protections. The bill’s structure also suggests likely resistance from owners, developers, and general contractors who may object to reduced flexibility in withholding payment or conditioning payment on upstream disputes.
The main points of contention are likely the limits on payment withholding, the prohibition on pay-if-paid style conditions, and the restrictions on suspending work or terminating a contract when payment is delayed. Owners and contractors may also object to the bill’s requirement that they provide detailed written notices within short deadlines and its rule that failure to give notice can be treated as acceptance of the invoice. Another likely dispute is the bill’s broad invalidation of out-of-state law and forum-selection provisions, which limits contractual freedom in construction disputes.