Pay when Paid Clauses: Part II

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Not all states allow contingent payment clauses.  For example, New York has banned such provisions.  However, in the State of Florida, a prime contractor can use a pay when paid clause to avoid paying a subcontractor if it is specifically worded.  The pay when paid clause must make it absolutely clear that payment to the subcontractor is conditioned upon receipt of payment by the prime contractor from the owner.  If it does not unequivocally state that the promised receipt of payment is a condition precedent, then courts will find the provision ambiguous and hold that payment must be received within a reasonable time period.

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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