The Real Lemon in the Bunch: Understanding Pay-If-Paid Clauses in Construction Contracts
Best Practices Construction Law
NOVEMBER 21, 2019
Contractors have a means of shifting the risk of non-payment by the owner to its subcontractor by including a certain payment provisions in the subcontract agreement. Court of Appeals for the 4th Circuit concluded that a “pay if paid” clause in a subcontract was not ambiguous and, therefore, enforceable against the subcontractor.
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