Talk is cheap: Loan agreements often exclusionary
Abstract: Many contractors on commercial projects are well aware that bank financing is in place to pay for the construction. Owners and bankers, however, usually take great pains to ensure their loan documents don’t permit an action by an unpaid contractor against the bank. A recent Pennsylvania case illustrates the lengths to which a court will go in excluding a contractor from the benefits under a construction loan agreement. This article drives home the point that contractors should insist on getting full payment on delivery of trailing waivers every month — anything less will likely leave them entirely at the mercy of the developer.