payment Archive

As unpaid subcontractors and suppliers cannot lien federal projects, the Miller Act was adopted to ensure payment bonds would guarantee payment of those providing labor or material to federal jobs. Contractors and their bonding companies have argued that “pay if paid” clauses or “no damage for delay” clauses in subcontracts can be utilized to insulate […]

In Ohio Fabricators, Inc. v. Aster Elements, Inc., 2019-Ohio-3978, Ohio’s Ninth District Court of Appeals recently refused to uphold a purported pay-if-paid clause despite the fact the clause included the phrase “condition precedent.” In the past, the use of the term “condition precedent” normally signified the payment terms were “pay-if-paid,” which required the general contractor to […]

“Pay when Paid” in many jurisdictions – including Ohio – means that while timing of payment may be delayed, there still is obligation to pay the sub within a reasonable period of time. In contrast, “Pay if Paid” (frequently utilizing words like “if” and “condition precedent”) means that not only timing, but also entitlement to […]

“Pay-if-paid” clauses are finding their way into subcontracts with increasing frequency. These clauses tie the subcontractor’s right to payment to the contractor’s receipt of payment from the owner. Federal projects require the contractor to post a “Miller Act” payment bond guaranteeing timely payment to subcontractors and suppliers. A recent case out of Virginia has answered […]

Payment is the lifeblood of any contractor, subcontractor or supplier. Yet many myths adversely affect your ability to timely secure payment. Here is my personal top ten. 1. “Don’t worry about it, we can always lien.” While lien rights are important, they are not a substitute for good credit practices. Lien rights only attach to any […]