News & Analysis as of

Subcontractors Pay if Paid

Baker Donelson

Louisiana Legislature Grants Sureties the Right to Raise Contractor Defenses, Including "Pay-If-Paid"

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Governor Landry recently signed into law two legislative acts that should allow Private Works Act and Public Works Act payment bond sureties to rely on defenses available to their general contractor principals in defense of...more

PilieroMazza PLLC

Weekly Update for Government Contractors and Commercial Businesses – May 2024 #3

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Department of Agriculture (USDA) Final Rule: Removing Reference to SAM (System for Award Management) Managed Identifier (SAMMI) - On May 13, USDA published a Final Rule to remove references to SAMMI which became obsolete...more

PilieroMazza PLLC

Enforceability of Pay-if-Paid Clauses in Construction Subcontracts: Mid-Atlantic Region

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Pay-if-paid clauses are conditional payment provisions regularly included in construction subcontracts. The intent of these clauses is to shift the risk of loss from a prime contractor to its subcontractors by making a...more

Carr Maloney P.C.

“Pay-if-paid” and “Pay-when-paid” Clauses in Virginia

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Similar to its neighbors in Maryland and the District of Columbia, Virginia has analyzed its treatment of the “pay-if-paid” or “pay-when-paid” clauses in construction contracts. Virginia previously allowed pay-if-paid clauses...more

Carr Maloney P.C.

“Pay-if-paid” and “Pay-when-paid” Clauses in Maryland and the District of Columbia

Carr Maloney P.C. on

General Contractors may seek to condition payments to Subcontractors by using “pay-if-paid” or “pay-when-paid” clauses in their contracts. Typically, as the name suggests, pay-when-paid provisions concern the timing of...more

Clark Hill PLC

Potential Change for “Pay-if-Paid” and “Pay-when-Paid” Clauses in Michigan

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To understand the difference between the two contractual clauses, it is important for general contractors and subcontractors to know the following: A “pay-if-paid” clause makes payment of the general contractor by the owner...more

PilieroMazza PLLC

Changes to Construction Prompt Payment Act: What It Means for Construction Contractors Operating in DC

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In 2023, the Private Contractor and Subcontractor Prompt Payment Act of 20131 (the Act) was amended to include additional protections for subcontractors on private projects by limiting a contractor’s setoff rights related to...more

Miller Nash LLP

[Webinar] Retainage, Back Charges, and Withholdings—Law and Best Practices in Oregon & Washington - October 24th, 9:00 am - 10:30...

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No matter your tier in the construction contracting chain, understanding the nuanced rules and procedures about retainage, back charges, and other payment withholdings is critical to managing cash flow and protecting your...more

Marshall Dennehey

The Lack of a Retainage Payment to a General Contractor Did Not Bar Payment to the General Contractor’s Subcontractors, Regardless...

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As addressed in the unreported case of J &M Interiors, Inc. v. Centerton Square Owners, LLC, (A-2536-19, 2021 WL 1976648 (N.J. Super. Ct. App. Div. May 18, 2021), the lack of a retainage payment to a general contractor (GC)...more

Tonkon Torp LLP

Construction Contract Tip – What Should Subcontractors Do About Pay-if-Paid Provisions?

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Almost every subcontract I see includes some type of “pay-if-paid” provision, meaning the general contractor (GC) is not required to pay the subcontractor until and if the GC receives payment from the owner. The precise...more

Troutman Pepper

Virginia Bans Pay-If-Paid Clauses to Protect Construction Subcontractors

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Virginia has joined the ranks of states that ban “pay-if-paid” clauses. Contingent payment clauses, like “pay-if-paid” and “pay-when-paid” clauses, protect contractors: A contractor need not pay its subcontractors or...more

Fox Rothschild LLP

New Jersey Appellate Division Confirms Enforceability of Pay-if-Paid Provisions

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In a case of first impression, the New Jersey Appellate Division has finally formally recognized the enforceability of pay-if-paid clauses in New Jersey, so long as those clauses clearly and unambiguously establish a...more

Cohen Seglias Pallas Greenhall & Furman PC

New Jersey Appellate Court Addresses Whether Pay-if-Paid Clauses Are Enforceable

In the construction industry, a “pay-if-paid” provision is common in subcontracts, which conditions a general contractor’s obligation to make payment to a subcontractor on the general contractor’s actual receipt of payment...more

Baker Donelson

Reminder: Beginning January 1, 2023, Virginia "Pay-if-Paid" Clauses No Longer Valid

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On January 1, 2023, SB 550 will take effect, invalidating pay-if-paid clauses in construction contracts in Virginia. With this change on the immediate horizon, contractors should update their contracts and policies to adapt....more

Bradley Arant Boult Cummings LLP

Nevada Supreme Court holds that pay-if-paid provisions require a case-by-case analysis to determine their enforceability

A “pay-if-paid” provision typically makes payment by an owner to a general contractor a condition precedent to the general contractor’s obligation to pay a subcontractor for work the subcontractor has performed....more

Maynard Nexsen

Virginia Joins North Carolina and South Carolina in Prohibiting Pay-if-Paid Clauses

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Imagine you are an electrical subcontractor working in Virginia for a general contractor on a commercial project. Because you perform electrical work, much of your scope falls after framing and roofing, and after the envelope...more

Robinson+Cole Construction Law Zone

Subcontract Payment Provisions Mean Exactly What They Say in Connecticut

The recent Connecticut Appellate Court decision in Electrical Contractors, Inc. v. 50 Morgan Hospitality Group, LLC, 211 Conn. App. 724 (2022), eliminated any remaining doubt regarding a subcontractor’s right to payment for...more

Akerman LLP

Virginia Prohibits Pay-If-Paid Clauses and Limits Pay-When-Paid Language

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On April 27, 2022, Virginia Governor Glenn Youngkin ratified amendments to two Virginia statutes, prohibiting pay-if-paid clauses in construction contracts, and limiting the effectiveness of pay-when-paid clauses in certain...more

Burr & Forman

Virginia Joins 11 Other States Prohibiting Pay-If-Paid Clauses in Construction Contracts

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Virginia has joined 11 other states that have expressly prohibited “pay if paid” clauses in construction contracts. If you have construction projects in Virginia, then read on. If you want know whether your state prohibits...more

Bradley Arant Boult Cummings LLP

Virginia Is for Lovers… of Strict Contract Language: New Law Prohibits Pay-if-Paid Clauses in Construction Contracts

Virginia has joined the growing number of states that prohibit “pay-if-paid” clauses. The new law, known as Virginia Senate Bill 550, amends Virginia’s Prompt Payment Act (Va. Code § 2.2-4354) and its relatively new (July 1,...more

PilieroMazza PLLC

New Virginia Law Prohibits “Pay-When-Paid” and “Pay-If-Paid” Provisions in Construction Contracts

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Construction contracts routinely set payment terms as “pay-when-paid” or “pay-if-paid.” These terms protect the prime contractor from bearing all the risk of nonpayment by the owner. In Virginia, however, that will not be...more

Cozen O'Connor

New Virginia Law Prohibits Pay-If-Paid Clauses in Construction Contracts

Cozen O'Connor on

On April 27, 2022, Virginia Governor Glenn Youngkin signed Senate Bill 550 into law, amending a portion of the Virginia Prompt Payment Act and a component of the Virginia wage theft statute. Va. Code § 2.2-4354 and VA. Code §...more

Snell & Wilmer

Unintended Consequences of Incorporating Subcontractor’s Proposals in the Subcontract

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Contractor and subcontractor negotiations often lead to contract terms and language being incorporated into the subcontract agreement, which then leads to surprising results when issues arise. These results often occur when...more

Woods Rogers

Virginia’s New Construction Payment Terms (Part 2)

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This article is a continuation of Monday’s article, and we will be discussing in detail the new payment terms for all construction contracts in Virginia....more

Woods Rogers

Virginia’s New Construction Payment Terms (Part 1)

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(Part one of a two-part article series) Confused about “pay-when-paid”, “pay-if-paid” clauses and the requirements of Virginia’s Prompt Payment Act on Virginia construction contracts? A new law intending to change the...more

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