Pay-when-paid vs pay-if-paid

One delays, one can extinguish

A pay-when-paid clause is about timing. It says the general will pay you when the owner pays it, and courts generally read it as allowing a reasonable delay rather than removing the obligation. Eventually the general has to pay you whatever the owner does.

A pay-if-paid clause is about risk. It makes the owner's payment a condition precedent to the general's obligation. If the owner never pays, the general may never owe you — you have taken the owner's credit risk on a job whose owner you never met.

How to spot which one you signed

The distinction is a matter of state law as much as of wording. Several states refuse to enforce pay-if-paid at all, others enforce it only where the language is unmistakable, and a few enforce it as written. Which state your job is in decides how hard you should push at award.

What to ask for at award

1. Strike “condition precedent” and “assumes the risk” outright.
2. Add an outside date: paid within N days of your certified application regardless of the owner.
3. Carve out non-payment caused by the general's own default or backcharges.
4. Preserve lien and bond rights expressly, whatever the payment clause says.
5. Ask for the owner's funding evidence on large jobs — a normal request, often granted.

Living with one you already signed

If you are already on the job under a pay-if-paid clause, your lien and bond rights matter more than usual, because the contract claim may be conditional and the statutory claim is not. Serve the preliminary notice, track the recording deadline, and do not let a “we have not been paid either” conversation run past it.

Ask, in writing, whether the owner has paid the general for your work. The answer is discoverable eventually and asking early sometimes produces the cheque without anyone deciding whether the clause is enforceable.