Construction contracts are oftentimes lengthy and complicated. The contracts underlying a construction project form the basis of the relationships between the signing parties, and provide an outline to how the project will go. A…Read More
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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…Read More
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,…Read More
The Ohio Supreme Court chimed in on “pay if paid” clauses last week, and it’s not good for subcontractors.
In Transtar Elec., Inc. v. A.E.M. Elec. Servs. Corp., the court decided that a pay if paid clause…Read More
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…Read More
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…Read More
Most states prohibit parties from contracting out of their mechanics lien rights. A supplier or a subcontractor, in other words, cannot agree before starting a project that they will waive their lien rights. These provisions – referred to as…Read More
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….Read More
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…Read More
Continuing our brief review of pay when paid and pay if paid clauses throughout the United States, this post examines these clauses under Colorado construction law. Colorado allows for both the timing mechanism…Read More