Pay-if-Paid Clauses Archives - Lamson Dugan & Murray LLP

27 Jan, 2021

How to Deal with the Dreaded Pay-if-Paid Clauses

Craig Martin2021-01-26T11:22:56-06:00January 27th, 2021|Construction Contractor Advisor, Construction Contracts, Nebraska Construction Law, Pay-if-Paid|

It seems that more and more general contractors are using pay-if-paid clauses in their construction contracts. Pay-if-paid clauses are some of the most controversial and heavily negotiated clause in construction contracts. This article will explain what pay-if-paid clause is and provides some guidance on how to negotiate around these difficult clauses. A pay-if-paid clause, if properly drafted, pushes the risk of non-payment from the general contractor to you. The clause [...]

13 Sep, 2019

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

Craig Martin2019-09-11T10:18:30-05:00September 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

Craig Martin2018-04-23T23:55:11-05:00March 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?

Craig Martin2018-04-23T23:55:19-05:00March 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 [...]