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CFM Review: A One-Page Construction Contract?

Every Friday, we select a few articles from the week that we think are worth your time as a construction financial manager (CFM). We look for compelling articles not only about financial topics, but about business, technology, and life, that challenges you to think about your role as a CFM…

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Michigan Court Limits Applicability of Pay If Paid Clauses

 

Pay if paid clauses are design to shift the risk of non-payment to lower tier parties on a construction project. The purpose, in states in which such clauses are allowed, is to obligate a contractor to pay its subcontractor only if the GC has received payment first. This means that absent actual…

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Ultimate Guide To Being A Successful Credit Manager

Every day, credit professionals are challenged to handle sensitive financial situations for businesses. They are trusted to analyze complex situations and to make an educated judgment about how to financially interact with other companies. This is a big job.  It can make drastic impacts on a company; that is, drastically good, or…

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Pay-When-Paid and Pay-If-Paid Clauses (In a Nutshell)

Have you ever come across the words “Pay-When-Paid” or “Pay-If-Paid” in your construction contracts?
These provisions are ultimately about determining who will bear the financial risk of a construction project. In other words, if the property owner doesn’t pay, who’s out of luck?
America’s public policy generally favors those lower on the chain when…

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Pay If Paid: Shifting the Financial Burden “Down the Chain”

Pay when paid, and pay if paid clauses are pretty common, but can be misunderstood – both in operation and purpose. Below, I’ll attempt to provide some answers and clarifications to common questions and misconceptions about these contract provisions. First, however, before pay when paid and pay if paid clauses are…

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Pay If Paid Clause Infographic: In Which States Are They Void?

Pay if paid clauses are an attempt to shift the risk of non-payment on construction projects to subcontractors, suppliers, and other parties on the lower end of the payment chain. These clauses are looked upon with disfavor by courts in most states, and require certain specific language in order to…

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