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Conditional Payment Clause

Conditional Payment Clause

Definition

A part of a contract, such as a construction contract, that conditions payment on some other event. For example, a general contractor may include a clause that conditions its payment of subcontractors on receiving payment from the project owner. These clauses are also commonly referred to as "pay when paid" and "pay if paid" clauses. States vary with respect to the enforceability of conditional payment clauses.

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