Some subcontracts may say you will be paid when the general contractor is paid by the owner. Does this mean you should wait until the project owner pays the general contractor? Well, it usually depends on the clarity of the terms stated in the contract. Here is what you need to know.
How Florida courts interpret payment clauses
Under Florida law, the specific wording inside your agreement heavily influences how a judge might view your situation. For instance, a Florida judge may treat an unclear pay-when-paid clause as a timing provision. In that case, the general contractor must pay you within a reasonable time, even if they haven’t received the payment from the owner. However, what counts as reasonable depends on the project.
However, a general contractor can shift the risk of the owner’s nonpayment onto the subcontractor if the contract clearly says so. Florida courts generally allow a subcontract to make the owner’s payment a condition of the subcontractor’s payment, but only when the language is clear and unambiguous. Other rules, such as statutory payment deadlines, prompt payment acts, or mechanic’s lien and bond rights, may still affect your legal options and recovery timelines significantly.
Protecting your business from nonpayment risks
A pay-when-paid clause does not automatically mean waiting indefinitely, but clear risk-shifting language can change that. Because the exact wording often decides the outcome, read the payment clause closely before you sign. An attorney who handles construction contracts can review it and explain how it may apply to your project.