Pay when Paid Clauses: Part IV

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The Peacock Court held that because this provision was a risk-shifting provision, the clause must contain specific language in order for it to be enforceable.  The clause must expressly state that payment to the subcontractor is conditioned upon receipt of payment by the prime contractor from the owner.  The Court also noted the public policy reason of holding pay when paid clauses to a higher standard.  Often, subcontractors are smaller than their prime contractor counterparts and cannot afford to bear the risk of owner non-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, Tampa, FL 33602, USA

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