Pay when Paid Clauses: Part III

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In Peacock Construction Company, Inc. v. Modern Air Conditions, Inc., 353 So.2d 840, the Florida Supreme Court looked at the issue of pay when paid clauses and their validity.  The Court reviewed a contract provision which provided that the subcontract would be paid: “within 30 days after the completion of the work included in this sub-contract, written acceptance by the Architect and full payment by the Owner.”  The Court held that this provision was ambiguous because it can be construed as pay within a reasonable time or that payment was contingent upon the prime contractor’s receipt of payment from the owner.  Because of the ambiguity, the Court held that the payment clause required payment within a reasonable time regardless of whether the prime contractor received payment.
 
 
Trenton H. Cotney
Florida Bar Certified in Construction Law
Glenn Rasmussen Fogarty & Hooker, P.A.
100 S. Ashley Dr., Suite 1300
Tampa, FL 33602
(813) 229-3333
http://www.glennrasmussen.com
Location: 100 S Ashley Dr #1300, Tampa, FL 33602, USA

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