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Owner's Payment Clause Creates Ambiguity For Pay-if-paid

Sunday, January 01, 2012 09:46 am


Payment -- Ambiguity

Int'l Eng'g Svs., Inc. v. Scherer Constr. & Eng'g of Cen. Fla., LLC, 2011 Fla. App. Lexis 16730 (Oct. 21, 2011)

A subcontractor prevailed on its claim that a pay-ifpaid contract clause was ambiguous and therefore unenforceable.

International Engineering Services, Inc. (IES) was the structural steel sub on a project in Maitland, Florida. Although it completed all its obligations under the subcontract, it did not receive payment from the general contractor, Scherer Construction & Engineering (Scherer). Citing the subcontract's pay-if-paid clauses, Scherer claimed that because it had not received payment from the project owner, its own obligation to pay IES had not yet occurred.

IES argued the subcontract's two pay-if-paid clauses were ambiguous and that ambiguities with regard to final payment in subcontr [...]

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