One word in a construction contract can change who carries the risk when payment does not come through.
In his latest article, “Pay-When-Paid vs. Pay-If-Paid: A Small Wording Difference with Big Consequences”, Corey Lloyd breaks down the important distinction between “pay-when-paid” and “pay-if-paid” clauses, and why that difference matters before a contract is signed.
Using the Louisiana Supreme Court’s decision in Southern States Masonry v. J.A. Jones as a reference point, Corey explains how similar-sounding payment provisions can lead to very different outcomes. A pay-when-paid clause may delay payment, while a properly drafted pay-if-paid clause can shift the risk of owner nonpayment to the subcontractor.
For general contractors, subcontractors, and project teams, the takeaway is simple: the exact wording matters. Understanding how payment risk is allocated before signing can help avoid costly disputes later.
Read the full article here: https://rllaw.com/pay-when-paid-vs-pay-if-paid-a-small-wording-difference-with-big-consequences/
