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Pay-if-paid"Clause Defeats Payment Bond Rights Subcontractors; Bonds-payment

Saturday, July 09, 2005 03:19 pm


The West Virginia Supreme Court has ruled that subcontract "pay-if-paid"clauses are enforceable in that state and can defeat a subcontractor's public works payment bond rights.

West Virginia University awarded a contract to Dick Corporation for construction of a Life Sciences Building. In accordance with the West Virginia public works statutes, Dick furnished payment and performance bonds.

The surety was CNA Surety Corporation. Dick subcontracted the electrical work to Wellington Power Corp. and the mechanical work to W. G. Tomko, Inc. The subcontracts contained identical pay-if-paid provisions stating that Dick had no payment responsibi [...]

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