Utah Contractor Practice Exam

What is the purpose of a stop notice on a public works project?

1. Stop all payments to the prime contractor until the subcontractors are paid

2. Lien the property

3. Withhold sufficient money from the prime contractor to pay the subcontractors who file stop notices

4. Stop all construction activity on a particular job

The correct answer is: Withhold sufficient money from the prime contractor to pay the subcontractors who file stop notices

The purpose of a stop notice on a public works project is to inform the public agency that a subcontractor or supplier has not been paid for their work or materials. By filing a stop notice, the subcontractor can request that the agency withholds sufficient funds from the prime contractor's payment to cover the amount owed to the subcontractor. This mechanism is designed to ensure that subcontractors and material suppliers receive payment even if the prime contractor fails to fulfill their obligations. This approach protects the rights of those who contribute to the project while maintaining the project’s funding and flow of work. By ensuring that money is retained to cover unpaid amounts, it creates a safeguard for subcontractors and encourages responsible financial practices on large projects. The stop notice process, therefore, acts as a crucial tool for enforcing payment obligations, rather than halting construction entirely or creating a lien on the property, which are separate legal actions with different implications.