Illinois Appellate Court Ruling Provides (Another) Reason to Double-Check Your Payment Clauses

A recent ruling out of the First District Illinois Appellate Court makes one thing clear: contractors and subcontractors alike should pay close attention to payment clauses on all contract forms. InBeal Bank Nevada v. Northshore Center THC, LLC, et al. , the Appellate Court interpreted a payment provision in a subcontract as "pay-when-paid" instead of "pay-if-paid," making the contractor liable for failing to pay a subcontractor-even though the contractor did not receive payment from the owner. The decision shows that it's in all parties' best interests to ensure they fully understand the risks they face in the event of an owner's payment default...

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