Avoiding Pay When Paid Pain

CDBI’s Risk Management Committee has published a new bulletin titled “Avoiding Pay When Paid Pain”. To deal with the uncertainties caused by cash flow issues, some parties have begun to insert “pay when paid” clauses into their contracts. Essentially, if the payor on a contract gets paid by its client (i.e. someone further up the contract pyramid), the payor will then, and only then, pay money owed to its payee. These clauses are not new, and given current economic uncertainties, these clauses have enjoyed a resurgence. Read more.