Latest News

13 Sep, 2019

Do You Have Lien Rights under a Pay-if-Paid Contract?

2019-09-11T10:18:30-05:00September 13th, 2019|Construction Contractor Advisor, Construction Contracts, Construction Lien, Pay-if-Paid|

How often do you review the payment terms of a contract with an eye toward whether you are waiving lien rights under that contract? This is something you should consider if your contract contains a pay-if-paid clause. I am often times asked about the difference between a pay-when-paid and pay-if-paid clause. The real difference is that a pay-when-paid clause simply allows a contractor a reasonable amount of time by which [...]

8 Mar, 2015

Pay-if-Paid Clauses, Nasty, but Enforceable

2018-04-23T23:55:11-05:00March 8th, 2015|Construction Contractor Advisor, Construction Contracts|

I am preparing for a presentation this week on Troublesome Contract Clauses to the Construction Specifications Institute (“CSI”), Nebraska Chapter. One of the clauses we will be discussing is the dreaded Pay-if-Paid clause, a particularly nasty provision that places the risk of owner's solvency squarely on the subcontractor's shoulders.  While pay-if-paid clauses can create tremendous problems for subcontractors, they are enforceable. Pay-if-Paid clauses eliminate the obligation to pay the subcontractor [...]

14 Mar, 2013

Pay-if-Paid Clauses—Do you have one in your Contract?

2018-04-23T23:55:19-05:00March 14th, 2013|Construction Contractor Advisor, Construction Contracts|

I know I sound like a broken record on this, but courts keep interpreting pay-if-paid clauses. The latest case I read was out of Ohio, Transtar Electric, Inc. v. A.E.M. Electric Services Corp., in which the trial court ruled the clause was a pay-if-paid clause, but was overruled by the Court of Appeals. In that case, the subcontract conditioned payment to the sub on payment received by the contractor from [...]