Calculate the maximum lien amount a subcontractor can claim under Louisiana's Private Works Act for work valued at $80,000 when the total project cost is $300,000 and the contract between owner and general contractor is $275,000:
Correct Answer
D) $73,333
The lien is limited to the lesser of: work performed ($80,000) or proportional share of owner-GC contract ($80,000/$300,000 × $275,000 = $73,333).
Why This Is the Correct Answer
Under the Louisiana Private Works Act, a subcontractor's lien is capped at the lesser of (1) the value of the work actually performed or (2) the subcontractor's proportional share of the owner-GC contract. The proportional share is calculated as: ($80,000 ÷ $300,000) × $275,000 = 0.2667 × $275,000 = $73,333. Since $73,333 < $80,000, the lien is capped at $73,333.
Why the Other Options Are Wrong
Option A: $275,000
$275,000 is the full owner-GC contract value. A subcontractor cannot lien for the entire prime contract amount — they are limited to their proportional share of it.
Option B: $80,000
$80,000 is the face value of the subcontractor's work, but the Private Works Act caps the lien at the lesser of the work value or the proportional share of the prime contract. Since the proportional share ($73,333) is lower, $80,000 is not the correct cap.
Option C: $300,000
$300,000 is the total project cost, not a lien limit. Liens are tied to the owner-GC contract amount, not the overall project budget.
Memory Technique
Remember: Sub's lien = LESSER of (work done) vs. (sub's slice of the pie). The 'pie' is the owner-GC contract. The sub's slice = (sub's work ÷ total project) × prime contract.
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A contractor in Louisiana completes $85,000 worth of work on a residential project. The owner pays $70,000 but disputes the remaining $15,000. If the contractor files a lien claim, what percentage penalty can be awarded if the contractor prevails in court?
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