Pay When Paid ArticlesRSS feed for this section

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…

Read More

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…

Read More

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…

Read More

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…

Read More

CFMA Says Owners Are Shifting Financial Risks Down The Contracting Chain – Here Are Your Options

ENR.com and the Construction Financial Management Association (CFMA) recently published some articles suggesting that “cash-strapped public and private owners are shifting greater risk onto contractors through onerous deal terms” [Owners Shift More Financial Risk as Recovery Remains Sluggish]. This is true, but it’s not necessarily new.  As this article will…

Read More

Do Your Mechanics Lien Rights Make Pay When Paid Clauses Irrelevant?

In 1791, Thomas Jefferson introduced the first mechanics lien law legislation and invented a public policy interest in the United States to always protect contractors, suppliers, and subcontractors from the risk of non-payment. As we’ve explored in previous posts, the ensuing 220 years brought epic battles between legislatures, courts, and…

Read More

Pay When Paid and Pay If Paid: Delaware

Sometimes, it seems as if determining whether pay if paid clauses and/or pay when paid clauses are enforceable in a certain state is nearly impossible. In many states, the question is only resolved by an analysis of the specific language of the individual clause itself, a labor intensive proceeding that,…

Read More