When it comes to construction projects, payment is a critical aspect of the process. However, some contracts may include “Pay-When-Paid” provisions, which can cause delays in payment to subcontractors and suppliers. These clauses state that payment will only be made to the subcontractor or supplier when payment has been received by the general contractor from the owner. This means that if the owner is late on paying the general contractor, the subcontractor or supplier may also experience delays in getting paid for their work.
These provisions can create a domino effect of delays and financial strain on the project. Subcontractors and suppliers may struggle to pay their own bills, leading to further delays and complications. In some cases, this can even lead to legal disputes and financial losses for all parties involved.
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Alexander Barthet is a board certified construction attorney in Florida and holds a B.S. in mechanical engineering. He manages The Barthet Firm, a ten lawyer construction law firm in Miami, and maintains a construction law blog at www.TheLienZone.com. He can be reached at 305-347-5295 or alex@barthet.com
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