ipl-logo

Conditional Pay Clause In Construction

950 Words4 Pages

Conditional payment clauses are also called pay-if –paid provisions. These are one of the most contentious construction contract provisions (Brennan, 2008). They are applicable in contractor-subcontractor contracts where the contractor agrees in writing to only pay the subcontractor, once he has been paid by the owner of the construction project (Brennan, 2008). The agreement places on the subcontractor the duty of completely abiding by the provision. The clause seeks to create an obligation on the general contractor to only reimburse the subcontractor once the proprietor of the construction project has paid him. Therefore, the subcontractor’s right to receive payment from the contractor is dependent on the owner having funds. The clause has …show more content…

An example of such a provision is found in section 4.7 of Document A401-2007 on the regulated types of agreements between contractors and subcontractor (American Institute of Architects, 2007, p.7). According to the provision, upon seven days of the contractor failing to pay the subcontractor through no fault of the subcontractor, the subcontractor shall stop the work until the contractor pays him (AIA, 2007, p.3). Another way that is considered more efficient in dealing with the unethical conditional payment clause is through the use of conditional payment bonds. States like Missouri and Maryland have adopted this system (Brennan, 2008, p.101). The subcontractor using this system is allowed to have a bond claim or to exercise a lien on the property of the contractor until the contractor pays him. Another practical solution is through the inclusion of the owner in the agreement between the contractor and subcontractor. A provision can be inserted into the agreement requiring that the contractor pays all of the subcontractor 's dues before receiving payment from the owner (Brennan, 2008, p.100). It would help to ensure that the contractor pays the subcontractor and hopefully will assist to reduce instances of the application of the conditional payments …show more content…

A change order is a written document prepared by a contractor detailing the amendments in the work required to be made in the process of the construction scheme and how these modifications will affect the period and the cost of the project (AIA, 2007, p.29). The examples of modifications that a general contractor may be required to take are alterations in the period of concluding the construction scheme, the amount of work to be carried out, the type of work and the systems of enforcing the venture (AIA, 2007). After the owner agrees with the contractor and architect about the change order and signs it, only then will the alterations be carried out without nullifying the agreement. In submitting the change order to the proprietor of the project, the designer or contractor is to compile a list of all the costs he has incurred in the process of implementing the changes. Once the contractor effects the changes, the owner using the itemized list pays the contractor for the costs incurred due to the

Show More
Related
264 Words | 2 Pages

and It staff of what, when, how, why and try it now. If they approve I would not allow any changes unless there is a failure in the efferent operation of the design. I would also require addition time and cost coverage it the problem is not with our design.

Read More
465 Words | 2 Pages

Id. Relocation of the condition does not make a difference in its condition. Id. Norton demonstrates that Herrera is entitled to judgment as a matter of law in this action. Like the hedge in Norton, Herrera’s land art remained a natural condition—despite its relocation. In Norton, the property owners planted a hedge. Relocating a hedge does not change the fact that it still remains a hedge.

Read More
669 Words | 3 Pages

This states that in a premises liabilities claim, it is the duty of the owner, possessor, or occupier of the land who would be the defendant, which would be responsible for injuries on his property. The premises can be “loaned” to another party which would absolve the owner of

Read More
651 Words | 3 Pages

Upgrades or changes might be required because of changes in work force, extension, spending plan, or different reasons. Furthermore, overhauls might be required as the project develops and extra necessities are required. The project manager is in charge of dealing with all proposed and endorsed changes to the communication management plan. Once the change is endorsed, the project manager will upgrade the supporting documentation and plan and will disseminate the upgrades to all stakeholders and project team. This approach is predictable with the project Change Management Plan and guarantees that all stakeholders stay informed and aware of any progressions to communication

Read More
593 Words | 3 Pages

Alex naturally appears older than she is also it would be hard to proven that she was given permission by her parent to sign the contract. The Dunphy would not be responsible for paying for the work done on their home but some type of agreement would need to be made because the equipment would need to be returned and the roof in the same condition or better. If the Dunphry were in Hawaii they would be no signature by Alex which would make the foreman company responsible for the work and they also risk trespassing when make them probably not pursue any type of payment.

Read More
1640 Words | 7 Pages

Krabappel is a new client of Mr. Simpson and not a long-standing one, it is necessary for their to be a clear establishment of rate of fee. After accepting Ms. Krabappel as a client, Mr. Simpson needed to explain to his client his general nature of the legal services to be provided, the basis, rate or total amount of the fee and whether and to what extent the client would be responsible for any costs. These details of the arrangement would be explained in writing in the form of a memorandum or pre-existing copy of the attorneys customary fee arrangements. These details of the arrangement must be communicated and understood between all involved Parties. As Mr. Simpson failed to communicate his fee arrangement with his client, he is in violation of Rule 1.5: Fees and begins his violations in terms of communication.

Read More
2567 Words | 11 Pages

It was initiallydisclosed to Gary that the SEC contract was a FPIF. This would have established a base budget for the project and would have been beneficial for STI. It would have also allowed SEC to receive additional monetary incentives for exceeding performance standards and expectations. Gary later discovered, through Sarah Wilson and Paula Arnold, that the terms of the contract were that of an FFP. In this type of contract there is no incentive for good performance and the contractor (SEC) is responsible for all additional costs accrued throughout the project.

Read More
814 Words | 4 Pages

To comply with this, we do a couple of things. First we give you a loan contract with all the terms of your loan. And second we offer you help in the form of your loan rep. As you 're finalizing your loan, your rep will give you your contract. In it, you 'll see: Your payment amount/s

Read More
640 Words | 3 Pages

Unfortunately, the contract is not in line with this good intention and fails to ensure the

Read More
761 Words | 4 Pages

Imagine that you and a friend decide to take a hiking trip on a beautiful mountain. You both are tired a take a rest to look at the breathtaking view. The day is sunny and warm. Now imagine your friend slipping on some loose rocks and getting hurt very badly and having to get airlifted to a hospital. Your friend is ok, but now she’s getting bills worth of thousands of dollars, for what?

Read More
2130 Words | 9 Pages

Powered by Research paper on models of change management 1 Research paper on models of change management Shireesha Muthaluru Under the guidance of Prof. Antala atul Course Period:-01/13/2015 to 02/24/2015 Submission Date: 02/03/2015 Wilmington University Research paper on models of change management 2 Abstract The research paper presents importance of models change in change management and an alternative way of thinking about technological change in organizations. The Information technology is the process of planning, developing, implementing or managing computer or electronic based applications.

Read More
1899 Words | 8 Pages

In the event that the borrower cannot get gainful employment after graduation a halt on interest and payment until borrower begins working. Another incentive is that if payments are continuous for 15 years the remainder of the loan is forgiven if records show that the borrower’s income has not increased significantly over the payment

Read More
542 Words | 3 Pages

Developing nations are really poor, such countries like China and India continue to live in extreme poverty. Extreme poverty is living on less than $1.90 a day, about 702 million people live in Extreme poverty. Kids have to go to work at an early age to help out their family. Thirteen is the median age for kids working in tobacco fields. In the US, the minimum wage is $7.25 an hour,

Read More
2223 Words | 9 Pages

Shareholder will finance a project and the dividends and profits are devided accordingly as agreed by the parties. Al Bai Bithaman Ajil Financing with defered repayment over a specific period of time. Al-Mudharaba An agreement to provide the capital by one party and

Read More
2545 Words | 11 Pages

Background: The industrialized building system (IBS) is defined as in which all components of the building are made on the site or in factory according to accurate and specific dimension and shape and then transported to the construction project to be erected . The development process of industrialized building system is not new in the construction industry. During the Second World War, there was too much destruction in the United Kingdom caused by the armed groups.

Read More

More about Conditional Pay Clause In Construction

Open Document