Hanna Lee Blake | ConsensusDocs The Virginia General Assembly has joined a minority of jurisdictions that ban pay-if-paid clauses in construction contracts on public and private projects. Senate Bill 550 went into effect applying to contracts executed after January 1, 2023, and most recently has been amended effective July 1, 2023. This update highlights the… Continue reading More Clear, But Not Yet Crystal: Virginia Amends its Prompt Payment Law and Legislation Banning “Pay-If-Paid Clauses in Construction Contracts Effective July 1, 2023
Tag: Pay-if-Paid Clause
Pay-if-Paid Clause in Construction Contract Found to Be Enforceable
Pauline Tutelo | Marshall Dennehey Key Points: Recently, the New Jersey Appellate Division ruled on the enforceability of a “pay-if-paid” provision contained in a construction contract. See JPC Merger Sub LLC v. Tricon Enterprises, Inc., 286 A.3d 1186 (N.J. Super. App. Div. 2022). The facts of this case tell a familiar story. However, the issues they… Continue reading Pay-if-Paid Clause in Construction Contract Found to Be Enforceable
Recent Opinions Clarify Enforceability of Pay-if-Paid Provisions in Construction Contracts
Patrick McKnight | The Dispute Resolver Several recent opinions and legislative actions have brought the controversial nature of pay-if-paid provisions into focus in early 2023. Pay-if-paid provisions are contractual mechanisms designed to shift the risk of non-payment from General Contractors to lower-tier subcontractors. In other words, pay-if-paid provisions generally do not require payment to downstream subs until… Continue reading Recent Opinions Clarify Enforceability of Pay-if-Paid Provisions in Construction Contracts
NY Appellate Court Enforces Pay-If-Paid Provision Against Party With No Lien Rights
Faith Simms | Troutman Pepper Entech Engineering, P.C. v. Dewberry Engineers, Inc., 204 A.D.3d 467, 167 N.Y.S.3d 55 (1st Dep’t 2022) The New York Supreme Court Appellate Division recently affirmed a ruling enforcing a pay-if-paid provision. Defendant Dewberry Engineers, Inc. (Dewberry) contracted with the New York City Economic Development Corporations’ Build-It- Back Hurricane Sandy Program… Continue reading NY Appellate Court Enforces Pay-If-Paid Provision Against Party With No Lien Rights
Construction Contract Tip – What Should Subcontractors Do About Pay-if-Paid Provisions?
Sam DeBaltzo | Tonkon Torp 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 language of the provision changes from contract to contract, but arises out of some variation of the… Continue reading Construction Contract Tip – What Should Subcontractors Do About Pay-if-Paid Provisions?