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Taft Construction Practice Group

Creating the foundation for a solid future


Taft has been helping clients build their futures for more than 125 years. We are business attorneys who see the big picture. Our Construction Team has broad experience in the construction industry and can provide a solid legal foundation for the work you do. We can assist you with every aspect of your project, from start to finish, whether you are an owner, developer, design professional, contractor or supplier. Our construction team is as multifaceted as you are.

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What Difference Does It Make? Pay If Paid vs. Pay When Paid

 Steven W. Weeks  

(513) 357-9307 


When does a subcontractor get paid for its work? Not surprisingly, this is one of the enduring major issues in subcontract agreements. The traditional provision is exemplified by AIA Document A401: "The Contractor shall pay the Subcontractor each progress payment no later than seven working days after the Contractor receives payment from the Owner."

If taken literally, this language would mean that if the contractor never gets paid by the owner, then the contractor is never required to pay the subcontractor. With rare unanimity, every state that has considered the issue in a reported decision currently has come to the conclusion that it should not be construed in that way. Rather, the courts say, this type of clause is intended to cover the timing of payment in the normal course, but if the contractor does not receive payment from the owner in the normal course, or within a reasonable time thereafter, the contractor remains obligated to pay the subcontractor the amount otherwise due. Thus, the clause is construed to apply only to the timing of payment and has come to be known as a "pay when paid" clause.



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Ohio's Prompt Payment Act Revisited

Lowell T. Woods

(937) 641-1728


Leverage is typically a critical element in any construction dispute, and parties should strategically use all available tools at their disposal to enhance their position when conflicts arise. Ohio's Prompt Payment Act (the "Act"), Ohio Revised Code § 4113.61, represents one such tool. The Act expands the remedies available to subcontractors and material suppliers for non-payment under certain circumstances, subject, however, to important defenses. When properly asserted, the Act is designed to create a strong incentive for general contractors and other upper tier parties to make timely payments due to all lower tier subcontractors, laborers and suppliers. Given the potential ramifications, it is very important for all parties involved in a payment dispute to understand the scope, benefits and risks associated with claims under the Act. 


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February 2015 Issue
What Difference Does It Make? Pay If Paid vs. Pay When Paid
Ohio's Prompt Payment Act Revisited

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