LEGAL: Conditional Payment Clauses & Prompt Payment

Conditional payment clauses like pay-if-paid and pay-when-paid provisions are nothing new. They’re used every day and generally they’re enforceable. But how do they affect other obligations in a construction contract, and when might they be unenforceable?  We’ll also discuss contracting strategies to limit the effect of these clauses in certain circumstances, and how to bake-in components to allow contractors to better monitor and drive project payments.

On the other end of the spectrum is Ohio’s Prompt Payment Act.  How is it enforced to ensure subcontractors and suppliers are timely paid for their work, and what are some recent developments in Ohio on when the Prompt Pay Act does, and does not, apply?  We will also review suggested steps and safeguards to ensure to payments are prompt. Meanwhile, HB 203 has made progress through the end of 2023 toward providing prompt pay relief to first tier prime contractors and construction managers on private projects.  We’ll review the status of that important bill to contractors and subcontractors alike, and what it could mean for our industry.

Instructor: Phil Truax

Truax Law Group, Ltd.

Phil is the founder and owner of the Truax Law Group, Ltd., based out of Avon, Ohio. Truax Law specializes in construction law in Northeast Ohio, and prides itself both on a depth of knowledge of practical construction and design issues, and a mastery of the law. The firm offers pragmatic yet tenacious service in risk management, strategic advice, claims management, and dispute resolution.

Prior to forming Truax Law in 2021, Phil spent his legal career working in prolific construction practice groups at Ohio firms, and building the construction practice at a regional firm. Before his legal career, Phil worked as a laborer and labor foreman for several years on large commercial projects for large general contractors and several other trade contractors. Phil graduated from Ohio University in 2001 with a bachelor’s degree in broadcast journalism and obtained his law degree from Case Western Reserve University in 2005.  Phil is licensed in Ohio and Kentucky.