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is "Pay when Paid" legal in CA

CaliforniaConstruction Contract

Been 45 days since GC paid invoice, they say its in my contract stating pay when paid from owner. SO they wont pay till they get paid. Is this Legal in CA?

1 reply

Jan 11, 2018
This is tricky in California, and ultimately it may come down to the exact wording of the pay when paid clause. Pay if paid clauses are not allowed in California, though, so a pay when paid clause may only alter the time that payment is made - and still, that time must be a reasonable amount of time. If the GC never gets paid, the GC will still ultimately owe payment to subs within a reasonable amount of time. However, sitting tight due to a pay when paid clause will not be a valid excuse for missing the deadline to file a lien. If payment hasn't come and is being withheld pursuant to a pay when paid clause, the time for filing a lien will not be extended - so it's important to keep in mind that deadline.
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