Pennsylvania Lower Court Decision Neutralizes Pay-if-Paid
In the case Eschbach Bros. V. Contracting Systems Inc. a Superior Court in
Pennsylvania decided not to give weight to a trial court's argument
that the Pennsylvania Contractor and Subcontractor Payment Act created
a pay-if-paid provision in every construction contract.
According to the superior court's ruling, "The parties never
argued during trial that the provisions of the Contractor and Subcontractor
Payment Act at issue were incorporated into the parties' written
contract, contrary to the parties' contract or negated the condition
precedent established in the contract. Therefore we find any argument
with regard thereto to be waived."
According to Bill Isokait, senior director and counsel, government
and industry relations, for the American Subcontractors Association,
the ruling from this case emphasizes that subcontractors in Pennsylvania,
including glazing contractors, need to be aware of contract language
with respect to payment since the state law does not automatically
create "pay-if-paid" conditions.
"Subcontractors need to be careful that there is not language
in the contract that makes payment to [them] contingent on whether
the owner pays the general contractor," he said.