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OHIO'S PROMPT PAY ACT – PART 1

Ohio's Prompt Pay Act is designed to encourage the swift payment of subcontractors and lower tier materialmen.  The Act provides that, if a subcontractor or materialman requests payment in time to allow the original contractor to include the request in his draw request to the owner, the original contractor shall pay, within ten calendar days following the receipt of payment from the owner, the following:

  1. To the subcontractor:  an amount equal to the percent of completion allowed by the owner on the subcontractor's contract.
  2. To the materialman:  an amount equal to all the materialman's approved invoices paid by the owner.

The original contractor may reduce the amount required to be paid above by any agreed retainage provision in the contract between the original contractor, subcontractor and materialman and may withhold any amounts reasonably necessary to resolve disputed liens or claims involving the work of that specific subcontractor or the materials of that specific materialman.



BACKGROUND OF AUTHOR

Mr. Petrony graduated with a Bachelor of Arts degree, summa cum laude, from Youngstown State University. Subsequently, he obtained a law degree from the Ohio State University College of Law.

Mr. Petrony practices law at The Law Offices of John F. Petrony, LLC in Poland, Ohio. He maintains a transactional practice with a primary emphasis in the fields of business law and real estate law. The business law portion of his practice is comprised, in large part, of the following areas:

  1. Business Sales and Acquisitions
  2. Mergers, Reorganizations and Conversions
  3. Commercial Transactions
  4. Limited Liability Company Law
  5. Corporate Law
  6. Business Formations
  7. Employment Law
  8. Franchise Law
  9. Internet Law
  10. Business Dissolutions
Mr. Petrony is a member of the following:

  • Ohio State Bar Association LLC Committee. This committee is responsible for drafting and amending Ohio’s LLC statute.
  • American Bar Association Committee on Partnerships and Unincorporated Business Organizations. This group participates in drafting model limited liability company and partnership legislation for use by the states.
  • Negotiated Acquisitions Committee of the American Bar Association. This committee, amongst other things, drafts model agreements for use in negotiating and documenting business acquisitions, mergers and reorganizations.
Lastly, Mr. Petrony frequently lectures on the topics of business law issues. He has presented seminars on behalf of a variety of local and national organizations, including, but not limited to, the National Business Institute and the Mahoning County Bar Association. Should you desire an in-house seminar on these issues to your group or organization, please let John know.

THE BUSINESS LAW ALERT IS INTENDED TO CONVEY GENERAL INFORMATION ABOUT BUSINESS LAW DEVELOPMENTS. THE ALERT IS NOT INTENDED TO BE, NOR SHOULD IT BE RELIED UPON AS, LEGAL ADVICE OR A LEGAL OPINION THAT CAN BE USED TO SOLVE INDIVIDUAL PROBLEMS IN ANY MANNER OR NATURE WHATSOEVER. MOREOVER, THE ALERT IS NOT AN OFFER OR SOLICITATION TO REPRESENT ITS RECIPIENTS, NOR IS IT INTENDED TO CREATE AN ATTORNEY/CLIENT RELATIONSHIP.

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