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"Pay-if-paid"Clause Not Enforced Payment; Subcontractors

Tuesday, January 03, 2006 05:03 pm

"Pay-if-paid"Clause Not Enforced Payment; Subcontractors

A New York court has refused to enforce a "pay-if-paid"clause in a subcontract even though the agreement said it was governed by the law of Florida which recognizes such provisions.

Telergy Metro, LLC awarded a contract to MasTec North America, Inc. to construct telecommunications improvements in the state of New York. MasTec, a Florida corporation based in Miami, subcontracted some of the electrical work to Welsbach Electric Corp. The subcontract said it would be governed by the law of Florida. The subcontract also stated: "All payments to Subcontractor by [...]

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