Pay When Paid Clauses - Sword & Shield

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"Pay When Paid" clauses in construction contracts are used as both a sword and a shield. If a general contractor fails to pay a subcontractor after it gets paid, the general contractor can be liable for interest and attorneys' fees to the subcontractor. This "sword" is used to force prompt payment. As illustrated in the case summary below - the clause is also a powerful "shield" for the contractor who does not get paid by the owner and faces multiple lawsuits from subcontractors.

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Published In: Civil Procedure Updates, Civil Remedies Updates, General Business Updates, Construction Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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