Fourth Circuit affirms enforceability of “pay-when-paid” clause

pay-when-paid

In its February 19 ruling in Universal Concrete Products Corp. v. Turner Const. Co., the Fourth Circuit once again confirmed the well-established Virginia rule that “pay-when-paid” clauses are enforceable in construction agreements in the absence of clear contractual ambiguity. In Universal Concrete, the Subcontractor unsuccessfully argued to the District Court on summary judgment that an ambiguity existed regarding payment by virtue of language in the AIA contract between the Owner and Turner. The District Court disagreed and the Fourth Circuit affirmed. The Fourth Court found that Turner had no obligation…

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