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"Pay-if-paid" Clause Did Not Shift Risk Of Nonpayment Condition Precedent; Payment

Saturday, December 03, 2005 04:41 pm

"Pay-if-paid" Clause Did Not Shift Risk Of Nonpayment Condition Precedent; Payment

A Maryland court has ruled that a "pay-if-paid" clause in a subcontract did not shift the risk of owner nonpayment from the prime contractor to the subcontractor.

The City of Frederick awarded a contract to Richard F. Kline, Inc. for construction of a flood control project. The contract included a contingent item for the removal of any contaminated soil that was encountered at the site. Kline subcontracted the excavation work to Shook Excavating & Hauling, Inc. The scope of work did not include the handling or removal of contaminated soil. The subcontract incorporated the terms of [...]

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