Pay-When-Paid Clause Can Be Defeated

"A usually more successful approach would be for the subcontractor's claim to be presented, as the main contractor's failure to pursue the subcontractor's claim"

The often-dreaded pay-when-paid clause in subcontracts has deterred many from pursuing what is an otherwise legitimate claim.

The common concern has always been that a defence would almost certainly be raised by the main contractor that no corresponding payment has been made by the employer and, as such, the subcontractor's claim is premature.

However, it has been recently demonstrated that pay-when-paid clauses are not undefeatable, provided a strategic approach is adopted.

In the past, attempts by subcontractors to claim amounts due to them, have been dismissed mainly because of the way they were pleaded.