Payment review
pay when paid
The GC may be saying, 'We only owe you after someone upstream pays us.' That can turn your invoice into someone else's credit risk.
Why it matters
A millwork shop has payroll, material bills, finishing labor, trucking, and install crews to pay whether or not the owner pays the GC on time.
Payment by Owner to Contractor is an absolute condition precedent to Contractor's obligation to pay Subcontractor.
Contractor will pay Subcontractor within a fixed period after approval of Subcontractor's payment application, except for amounts directly disputed because of Subcontractor's own defective work.
Can we revise the payment clause so approved work is paid within a fixed window and owner nonpayment that is unrelated to our scope does not become our shop's credit risk?
Bring counsel in if the GC will not remove condition-precedent wording, if the project has large material deposits, or if payment depends on final owner closeout.
Next step
Check the actual subcontract language.
Use the phrase checker or upload the subcontract to see whether this wording appears with other risk terms.