Section 48 Negotiating Strategy

• Library: Construction Law 2004 Forms

Suggested contract language is as follows:

Subject to the terms of this Agreement, general contractor shall have no obligation to pay subcontractor for the subcontract work, unless and until the owner pays general contractor for such work. General contractor agrees to pay subcontractor within seven (7) calendar days after receipt of such payment from the owner. Subject to the following provisions, the obligation of general contractor to pay any progress payment or final payment to subcontractor hereunder or to pay for extra or changed work or any claim by subcontractor for delay damages or for additional compensation is subject to the condition precedent of payment by owner to general contractor therefor. The parties further agree:

(a) If the reason general contractor has not been paid by the owner is because of subcontractor's faulty performance, work, or material, payment by owner to general contractor is a condition precedent to general contractor's obligation to pay subcontractor for such work or material or damages;

(b) If the reason general contractor has not been paid by owner is because of faulty performance, work...