What is Pay-if-Paid Clause?

A Pay-if-Paid clause is a contractual provision commonly used in construction contracts that shifts the risk of non-payment from the contractor to the subcontractor. In essence, this clause stipulates that the subcontractor will only be paid if the contractor is paid by the owner for the work performed. If the contractor is not paid for any reason, such as insolvency or dispute with the owner, the subcontractor may not receive payment for their services, even if they have completed the work satisfactorily. This clause essentially transfers the financial risk of non-payment from the contractor to the subcontractor, making it a potentially risky proposition for subcontractors.The Pay-if-Paid clause is often a point of contention in construction contracts, as subcontractors may view it