The Real Lemon in the Bunch: Understanding Pay-If-Paid Clauses in Construction Contracts
Best Practices Construction Law
NOVEMBER 21, 2019
In a payment dispute between the subcontractor and contractor, the contractor argued that the “pay if paid” clause provided an absolute defense to payment. Other jurisdictions, such as C alifornia, New York, Nevada and North Carolina, have expressly ruled that the “pay if paid” clauses are unenforceable as a violation of state public policy.
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