Highway Construction Payments

Del. Code tit. 17, ch. 8
in effect

Del. Code tit. 17, § 801 Definitions.

As used in this chapter: (1) “Contractor” includes, but is not limited to, an architect, engineer, nursery worker, landscaper, subcontractor or any other person who enters into any contract with the Department of Transportation, its agents or authorized employees for the erection, construction, completion, authorization or repair of any highway, right-of-way, turnpike or toll express highway, including shoulders, median strips, parkways and islands, by such contractor. (2) “Moneys or funds” includes, but is not limited to, the entire amount of all moneys or funds received by a contractor, as defined in this section, in connection with a contract with the Department of Transportation for the erection, construction, completion, authorization or repair of any highway, right-of-way, turnpike or toll express highway, including shoulders, median strips, parkways and islands, by such contractor, and moneys or funds by way of a loan or advance for the purpose of such erection, construction, completion, authorization or repair of any highway, right-of-way, turnpike or toll express highway, including shoulders, median strips, parkways and islands, by such contractor.

Del. Code tit. 17, § 802 Payments to contractor impressed with trust.

All moneys or funds received by a contractor in connection with the erection, construction, completion, authorization or repair of any highway, right-of-way, turnpike or toll express highway, including shoulders, median strips, parkways and islands, by such contractor shall be trust funds in the hands of the contractor.

Del. Code tit. 17, § 803 Use or application of money received by contractor.

(a) No contractor, or agent of a contractor, shall pay out, use or appropriate any money or funds described in § 802 of this title until they have first been applied to the payment of the full amount of all moneys due and owing by the contractor to all persons furnishing labor or material for the erection, construction, completion, authorization or repair of any highway, right-of-way, turnpike or toll express highways, including shoulders, median strips, parkways and islands, by such contractor, whether or not the labor or material entered into or became a component part of any such highway right-of-way, turnpike or toll express highways, including shoulders, median strips, parkways and islands, and whether or not the same were furnished on the credit of such highway right-of-way, turnpike or toll express highways, including shoulders, median strips, parkways and islands, or on the credit of such contractor. (b) All general contractors or agents of any general contractor receiving funds impressed with a trust under this chapter shall, within 30 days of receipt of any payment, file a statement in a form to be determined by the Division of Highways, with the contracting state agency that the contractor or the contractor’s agent has paid all subcontractors furnishing labor or material the full sum due them at that stage of the contract, except any funds withheld under the terms of the contract. (c) In any instance where the contract stipulates that the general contractor will receive a series of prorated payments the general contractor or the general contractor’s agents shall, upon the receipt of each payment, pay all subcontractors furnishing labor or materials, who have properly completed all work required of them at that stage of the contract, according to the same prorated formula which governs payments to the general contractor, i.e., if the general contractor receives 10% initially, persons furnishing labor and materials will receive 10% initially, and so through the course of the contract.

Del. Code tit. 17, § 804 Contractor’s failure to use or apply money in accordance with § 803 of this title.

(a) Failure of a contractor, or an agent of a contractor, to pay or cause to be paid, in full or pro rata, the lawful claims of all persons, firms, associations of persons or corporations furnishing labor or material as required by § 803 of this title within 30 days after the receipt of any moneys or funds for the purposes of § 802 of this title shall be prima facie evidence of the payment, use or appropriation of such trust moneys or funds by the contractor in violation of this chapter. (b) Prior to any payment made to any subcontractors for materials, workmanship and all other supplies furnished by such person, persons or corporations an inspection shall be made by the Department of Transportation of all supplies and work furnished by the subcontractors and their approval of the work shall be required before payment is made.

Del. Code tit. 17, § 805 Penalties.

Whoever, being a contractor, or any agent of a contractor, pays out, uses or appropriates, or consents to the paying out, use or appropriation of any moneys or funds received for any of the purposes specified in § 802 of this title, prior to paying in full or pro rata to the extent of the moneys or funds so received all the lawful claims of all persons furnishing labor or materials, as prescribed by § 803 of this title, shall be fined not more than $1,000 or imprisoned not more than 3 years or both.
Source: DE Code (Official Site)URL: https://delcode.delaware.gov/title17/c008/index.htmlFetched: 10/4/2026