Jessica A.duHoffmann and Jonathan R. Neri | Piliero Mazza In the world of construction, it is essential for both prime contractors and lower-tier subcontractors to carefully manage financial risk when negotiating subcontract agreements. While a party’s ability to distinguish and understand pay-if-paid and pay-when-paid clauses—a critical first step in identifying financial risk—the analysis should not stop there. To protect the… Continue reading Top 10 Killer Construction Contract Clauses, Part 2: Pay-If-Paid and Pay-When-Paid
Tag: Pay-When-Paid Clause
“Pay-if-paid” and “Pay-when-paid” Clauses in Maryland and the District of Columbia
Andrew Nagel and Kenneth Stallard | Carr Maloney General Contractors may seek to condition payments to Subcontractors by using “pay-if-paid” or “pay-when-paid” clauses in their contracts. Typically, as the name suggests, pay-when-paid provisions concern the timing of payment by the General Contractor, but, arguably, do not relieve the General Contractor from its obligation to pay… Continue reading “Pay-if-paid” and “Pay-when-paid” Clauses in Maryland and the District of Columbia
“Pay-if-paid” and “Pay-when-paid” Clauses in Maryland and the District of Columbia
Andrew Nagel and Kenneth G. Stallard | Carr Maloney General Contractors may seek to condition payments to Subcontractors by using “pay-if-paid” or “pay-when-paid” clauses in their contracts. Typically, as the name suggests, pay-when-paid provisions concern the timing of payment by the General Contractor, but, arguably, do not relieve the General Contractor from its obligation to pay the… Continue reading “Pay-if-paid” and “Pay-when-paid” Clauses in Maryland and the District of Columbia
Potential Change for “Pay-if-Paid” and “Pay-when-Paid” Clauses in Michigan
Joshua Wilk | Clark Hill To understand the difference between the two contractual clauses, it is important for general contractors and subcontractors to know the following: Under current Michigan law, a contract may contain a “pay-if-paid” clause stating that the subcontractor will be paid only after the general contractor is paid. Given pay-if-paid provisions are… Continue reading Potential Change for “Pay-if-Paid” and “Pay-when-Paid” Clauses in Michigan
Virginia Bans Pay-If-Paid Clauses to Protect Construction Subcontractors
Meghan Hunter Harrison | Troutman Pepper Virginia has joined the ranks of states that ban “pay-if-paid” clauses. Contingent payment clauses, like “pay-if-paid” and “pay-when-paid” clauses, protect contractors: A contractor need not pay its subcontractors or suppliers until the owner pays the contractor. A “pay-if-paid” clause conditions a subcontractor’s right to payment on the owner paying the contractor.… Continue reading Virginia Bans Pay-If-Paid Clauses to Protect Construction Subcontractors