Under the Alabama Prompt Pay Act, the general contractor must pay subcontractors within 7 days after receiving payment from the owner, and in no event later than 30 days after completion of the subcontractor’s work if the GC has not been paid. Your subcontract should mirror these statutory deadlines so that late payments automatically trigger the statutory interest and remedies without negotiation.

Alabama caps retainage at 10% of the contract price and requires released retainage to be held in escrow or paid into a joint checking account. Your agreement should specify the exact retainage percentage, the release schedule (typically at substantial completion and final completion), and payment of statutory interest on withheld retainage.

While Alabama has not enacted a blanket statutory ban on pay-if-paid clauses, courts and statutes in most states treat "pay-when-paid" as a reasonable timing provision rather than an absolute condition. Check Alabama Code Title 35, Chapter 22 (Alabama Liens Law) and Alabama Prompt Pay Act, Ala. Code Title 8, Chapter 29 for specific restrictions, and make sure your subcontract states that payment from the owner is not an absolute condition precedent to your right to be paid.

Alabama does not mandate statutory lien waiver forms; conditional and unconditional waivers are enforceable if they clearly state the amount and scope of the waiver. A waiver is not effective unless the subcontractor has actually received payment. Never sign an unconditional waiver until payment has actually cleared your bank account, and make sure your waiver identifies the specific billing period and amounts to avoid losing lien rights on future work.

Alabama does not have a comprehensive anti-indemnification statute for construction contracts; broad-form indemnification clauses are generally enforceable, so subcontractors should negotiate express limits. See Ala. Code Title 8, Chapter 29 for payment remedies. Always read the indemnification clause carefully — even in states with anti-indemnity statutes, "broad form" indemnity for joint negligence is typically still enforceable.

Alabama requires filing a mechanic’s lien statement within 6 months of the last work or materials furnished. Alabama requires a Notice of Intent to claim a lien before furnishing materials or labor, and a general contractor’s bond is mandatory on public jobs over $50,000. Send statutory notices by certified mail or another trackable method, keep copies of everything, and calendar the deadlines immediately upon each project’s completion.