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Alabama Supreme Court Addresses "Pay-when-paid" Condition Precedent; Payment-final

Sunday, February 02, 2003 12:36 pm

 
Alabama Supreme Court Addresses "Pay-when-paid" Condition Precedent; Payment-final

The Alabama Supreme Court has ruled that a paywhen- paid clause in a subcontract did not shift the risk of owner nonpayment from the prime contractor to the sub. The clause merely established the timing of final subcontract payment.

The City of Mobile awarded a contract to Bill Harbert Construction Co. to upgrade a wastewater treatment plant. Harbert furnished a payment bond issued by Federal Insurance Co. Harbert then awarded a subcontract to I. Kruger, Inc. to furnish and install a reactor basin oxygen dissolution system. The subcontract called for monthly progress payments subjec [...]

 
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