Pay-if-paid and pay-when-paid clauses permeate large construction projects In theory, the clauses protect a contractor from downstream liability where its upstream or hiring party (usually the owner) fails to pay. Beal Bank Nevada v. Northshore Center THC, LLC, 2016 IL App (1st) 151697 examines the fine-line distinction between PIP and PWP contract terms. a lender …
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The Contractual ‘Pay-If-Paid’ Clause – How Broad Is Its Scope?
A pay-if-paid (PIP) clause in a construction contract says “I, the general contractor, will only have to pay you, the subcontractor, if the owner – the guy I contract with – pays me.” Substitute “when” for “if” in the above example and you have a pay-when-paid clause. Both of these clauses are standard in multi-layered …
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