DGI-Menard, Inc. v. Yonkers Contracting Co.

NY Decision Enforcing Pay-If-Paid Clause in Construction Contract

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On motion for partial summary judgment, the trial court dismissed more than $1.5 million in unpaid retention and owner-caused delay claims asserted by plaintiff-subcontractor against defendant-general contractor on the ground that the parties' subcontract contained a pay-if-paid clause and it was undisputed that the owner had not paid the defendant the moneys claimed by the plaintiff. Despite NY's general prohibition against such provisions as being violative of the anti-lien waiver provisions of NY's mechanic's lien, the court enforced the pay-if-paid clause because the project was located in NJ and NY mechanic's lien law does not apply to projects outside of NY.

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Reference Info:Decision | State, 2nd Circuit, New York | United States


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