William L. Porter | Porter Law Group The Situation California Construction Subcontractors Face in Obtaining Payment: California construction subcontractors find themselves faced with a significant payment issue every time they are asked to sign a subcontract on a major project. Invariably, the subcontract the prime contractor presents to the subcontractor for signature will contain a… Continue reading Contractual “Pay if Paid” and “Pay when Paid” Clauses? What is a California Construction Subcontractor to Do?
Tag: Pay-When-Paid Clause
California Precludes Surety From Asserting Pay-When-Paid Provision As Defense To Payment Bond Claim
Nicholas Korst | Ahlers Cressman & Sleight In a recent case in California, the Court of Appeals held that a surety who had issued a public works payment bond cannot rely on the “Pay-When-Paid” provision in the subcontract as a defense against the subcontractor’s claim against the payment bond.[1] The case was a public works… Continue reading California Precludes Surety From Asserting Pay-When-Paid Provision As Defense To Payment Bond Claim
In California, It’s Time to Revisit Your “Pay-When-Paid” Contract Clause
Michael Barker | Snell & Wilmer In California, the “pay-when-paid” contract language typically found in general contractor’s subcontractor agreement may no longer be enforceable. A contract provision requiring a subcontractor to wait until the general contractor concluded its litigation with the owner before it could seek payment on a payment bond was held unenforceable as… Continue reading In California, It’s Time to Revisit Your “Pay-When-Paid” Contract Clause
“Pay When Paid” Provisions May Not Be Dead, Yet
Garret Murai | California Construction Law Blog Sophisticated contractors know that in California contractual “pay when paid” provisions are enforceable but that “pay if paid” provisions are not. “Pay If Paid” v. “Pay When Paid” Provisions A “pay if paid” provision is one in which a higher tier party agrees to pay a lower tier… Continue reading “Pay When Paid” Provisions May Not Be Dead, Yet
Court Provides Guidance on ‘Pay-When-Paid’ Provisions in Construction Subcontracts
Ted R. Gropman and Cindy J. Lee | ConsensusDocs On April 17, the California Court of Appeal decided Crosno Construction, Inc. v. Travelers Casualty & Surety Company of America,1 effectively narrowing the scope of enforceable “pay-when-paid” provisions in construction subcontracts to the extent the subcontractor seeks recovery against a general contractor’s payment bond surety. Although the Crosno case involved… Continue reading Court Provides Guidance on ‘Pay-When-Paid’ Provisions in Construction Subcontracts