SENATE, No. 913

STATE OF NEW JERSEY

INTRODUCED MARCH 7, 1996

By Senator KYRILLOS

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. Every construction contract 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 or related to the contract shall be submitted to arbitration pursuant to the Construction Industry Arbitration Rules of the American Arbitration Association.

    2. This act shall take effect immediately.

STATEMENT

    This bill provides that every contract for construction work entered into in accordance with the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.) shall provide that disputes arising under the contract shall be submitted to arbitration pursuant to the Construction Industry Arbitration Rules of the American Arbitration Association. At present, when a dispute arises between public owners and a contractor concerning a construction contract, the parties' only recourse is the courts. This recourse can be expensive, time-consuming and impractical during the executory period of a construction contract. Arbitration represents a reasonable and expeditious method of resolving contract disputes and is commonly used throughout the construction industry.

Requires that disputes regarding construction contracts under the "Local Public Contracts Law" be submitted to arbitration.