Recent Court Decision Affects Enforceability of Pay-When-Paid Clauses
Construction contracts are exchanged so routinely that it is not uncommon for contractors to give the documents a quick glance or not even read them altogether before signing. Even when a contractor examines a contract thoroughly, legal terminology with profound impact may be overlooked. Since it is rarely feasible to have an attorney read every contract, the best course of action for contractors to avoid risk is to understand some of the key things to look out for. “Pay-if-paid” and “pay-when-paid” clauses illustrate how a single word can make a vast difference in contract interpretation.
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