Reviewed September 7, 2026.
This reference explains terms used in New York construction contracts and payment disputes. Read each definition with the governing contract and statute.
Contracts and project participants
Arbitration clause
A contract provision submitting specified disputes to an arbitrator for a binding decision. The clause’s scope, required notices, preliminary steps and applicable rules control; it does not necessarily cover every dispute.
Mediation clause
A provision requiring or permitting assisted settlement discussions with a neutral mediator. A mediator does not impose a decision. The agreement may make mediation a required step before arbitration or litigation.
General contractor and prime contractor
A prime contractor contracts directly with the owner. A general contractor commonly coordinates multiple trades, but an owner may retain separate prime contractors for different scopes.
Subcontractor and sub-subcontractor
A subcontractor contracts with a contractor for part of the work; a sub-subcontractor contracts with a subcontractor. The scope may include labor, materials or both. Lien eligibility depends on the work, contractual relationships and applicable statute.
Materialman or material supplier
A person or business supplying project materials. The term “materialman” appears in the Lien Law. Whether a supplier has lien or bond rights depends on the supply relationship and other claim requirements.
Mobilization and demobilization costs
Costs of bringing personnel, equipment and resources to a project or removing them. Demobilization may follow completion, suspension or termination. Recoverability depends on the contract and circumstances.
Liens, waivers and enforcement
Final lien waiver
A document releasing lien rights to the extent stated in its terms. A final waiver may also release contract claims. Its title does not prove that payment cleared; review conditions, exclusions, covered work and any reservation of claims before signing.
Partial lien waiver
A waiver associated with a portion of work or a progress payment. Its actual language determines the amount, dates and claims released. An unconditional form can have consequences before funds are received.
Discharge bond
Security used to discharge a lien from private property or a public contract fund while preserving an enforcement claim against the substituted security. Lien Law § 19(4) and § 21(5) provide for an undertaking equal to 110% of the lien. Filing, service and surety requirements also apply. Bonding a lien does not establish that the claim is valid or paid.
Lien foreclosure
An action to establish and enforce a mechanic’s lien. The available relief differs for private real property, public contract funds and a lien discharged through a bond or deposit. Filing and continuation deadlines remain important.
Satisfaction or release of lien
A properly executed document filed in the appropriate office to discharge all or part of a filed lien. Review the payment conditions and scope of the release before delivery or filing.
Section 38 demand
A written demand by an owner or contractor for a verified statement identifying the labor or materials, their values and the contract terms underlying a lien. Under Lien Law § 38, failure to provide a sufficient response within five days allows an application for a court order requiring compliance. The initial missed deadline does not automatically cancel the lien.
Section 59 demand
A notice requiring a lienor to commence enforcement by a specified date at least 30 days after service, or show cause why the lien or substituted security should not be discharged. Lien Law § 59 has specific notice, service and court-procedure requirements.
Construction trust funds
Article 3-A trust
The Lien Law treats specified construction assets as trust assets in the hands of an owner, contractor or subcontractor for designated beneficiaries. Statutory definitions, permitted expenses, recordkeeping and outstanding trust claims govern their use; the rule is not simply that every project receipt may be spent freely.
Section 76 demand
An eligible beneficiary may choose to examine and copy trust records or receive a verified statement. Lien Law § 76 generally permits a request after a claim has been payable for 30 days, no more often than monthly, and sets a ten-day response period. The request must identify the beneficiary, improvement, trust and unpaid claim and be properly served.
Related legal services
Kushnick Pallaci PLLC assists with construction contracts, mechanic’s liens, lien itemization demands and construction trust disputes. Call 631-752-7100 or consult the firm’s current contact page.
Attorney Advertising. Definitions are general information, not legal advice or a complete statement of every requirement.
