The party seeking to enforce a pay of paid clause should verify that other provisions of the subcontract, and the prime contract, do not conflict with the pay if paid provision.
The first step for drafting an enforceable pay if paid clause is to confirm that the state where the project is located enforces pay if paid clauses; then make sure the provision is clear and unambiguous with respect to the party’s intent. Drafting an enforceable pay if paid provision must be clear and unambiguous, and it should expressly state that payment by the owner is a condition precedent to contractor’s duty to pay subcontractor.; it should include other conditions precedents, such as owner and architect’s acceptance of the subcontractors work; and it should expressly state that the subcontractor assumes the risk of the owner’s nonpayment. This video provides an example of pay if paid and pay when paid provisions.
Agenda
Faculty
Scott D. Cahalan
Smith, Gambrell & Russell, LLP
- Partner in the construction law and international arbitration sections of Smith, Gambrell and Russell, LLP, an AmLaw 200 firm
- Part-time instructor of Construction and Development Law at the Georgia Institute of Technology
- General counsel to the Georgia Utility Contractor’s Association
- Worked as an engineer for an ENR® top 50 general contractor
- Drafted form contracts for the Associated Owners and Developers, a national association
- Recognized by Chambers USA, The Best Lawyers in America, and Georgia Super Lawyers
- Frequent author and lecturer on construction law
- Member of the State Bar of Georgia, Northern District of Georgia, and 11th Circuit Court of Appeals
- J.D., cum laude, from University of Georgia; B.S. in construction engineering from Iowa State University
- Can be contacted at [email protected], [email protected], and (404) 815-3711
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