Wampler & Souder, LLC
Silver Spring:
240-833-2284
Frederick:
301-668-5111
Upper Marlboro:
301-736-5432

How Enforceable is a Pay-When-Paid Clause?

A "pay-when-paid" clause in a construction contract is a provision that applies the payment terms of the contract between the property owner and the general contractor to the contract between the general contractor and sub-contractor. Often times, a general contractor will use this clause as a basis for refusing payment to a sub-contractor because the general contractor claims it has not been paid for the sub-contractor's work.

In Maryland, however, such a clause does not prevent a subcontractor from seeking a mechanic's lien. In addition, the way in which the clause is written may make it unenforceable. Finally, if a property owner is justifiably refusing payment for issues unrelated to the subcontractor's work, this can also make the clause unenforceable.

Whether you are a general contractor or a sub-contractor, you will likely run into a situation like this at some point. Therefore, it is critical to speak to a knowledgeable construction law attorney to ensure that you are properly protected.

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Frederick Office
170 West Patrick Street
Frederick, Maryland 21701

Phone: 301-668-5111
Fax: 301-668-2770
Frederick Law Office Map

Silver Spring Office
12114B Heritage Park Circle
Silver Spring, Maryland 20906

Phone: 240-833-2284
Fax: 301-942-8296
Silver Spring Law Office Map

Upper Marlboro Office
14452 Old Mill Road
Suite #301
Upper Marlboro, Maryland 20772

Phone: 301-736-5432
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