California Appellate Court Finds Open-Ended Pay-When-Paid Clause Unenforceable
A California appellate court found unenforceable a pay-when-paid clause in a contract between a general contractor and subcontractor on a California public works project.
On April 17, 2020, the Fourth District California Court of Appeals in Crosno Construction, Inc. v. Travelers Casualty, found unenforceable a pay-when-paid clause in a subcontract between a general contractor and subcontractor. The appellate court held that the pay-when-paid clause violated California public policy and did not provide for payment within a reasonable time.
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