Title 40A.

Chapter 11.

Subchapter Q (New)

Construction Contract

Disputes

§1

C. 40A:11-50

P.L. 1997, CHAPTER 371, approved January 19, 1998

Senate, No. 913 (Second Reprint)

An Act concerning certain construction contracts and supplementing P.L.1971, c.198 (C.40A:11-1 et seq.).

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. ²[Every] All² construction contract ²documents² entered into in accordance with the provisions of P.L.1971, c.198 (C.40A:11-1 et seq.) after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) shall provide that disputes arising under ²[or related to]² the contract shall ²[¹first be submitted to mediation pursuant to the American Arbitration Association, or to another mediation procedure as agreed to by the contracting parties. If the dispute is not resolved by mediation, then the dispute shall either¹ be submitted to ¹binding¹ arbitration pursuant to the Construction Industry Arbitration Rules of the American Arbitration Association ¹; or to another binding alternate dispute resolution procedure as agreed to by the contracting parties.]be submitted to a process of resolution pursuant to alternative dispute resolution practices, such as mediation, binding arbitration or non-binding arbitration pursuant to industry standards, prior to being submitted to a court for adjudication. Nothing in this section shall prevent the contracting unit from seeking injunctive or declaratory relief in court at any time. The alternative dispute resolution practices required by this section shall not apply to disputes concerning the bid solicitation or award process, or to the formation of contracts or subcontracts to be entered into pursuant to P.L.1971, c.198 (C.40A:11-1 et seq.). ²

    Notwithstanding industry rules or any provision of law to the contrary, whenever a dispute concerns more than one contract, such as when a dispute in a contract involving construction relates to a contract involving design, architecture, engineering or management, upon the demand of a contracting party, other interested parties to the dispute shall be joined unless the arbitrator or person appointed to resolve the dispute determines that such joinder is inappropriate. Notwithstanding industry rules or any provision of law to the contrary, whenever more than one dispute of a similar nature arises under a construction contract, or related construction contracts, upon the demand of a contracting party, the disputes shall be joined unless the arbitrator or person appointed to resolve the dispute determines that the disputes are inappropriate for joinder.

    ²[Once a binding decision is rendered in connection to a dispute, either party may move to have the award vacated or modified by the court in accordance with N.J.S.2A:24-1 et seq.]²

    For the purposes of this section, the term "construction contract" means a contract involving construction, or a contract related thereto concerning architecture, engineering or construction management¹.

    2. This act shall take effect immediately.

Requires that construction disputes under the "Local Public Contracts Law" be submitted to alternate dispute resolution procedure prior to court adjudication.