Pay When Paid Clauses

Most subcontracts contain a provision that the Contractor is not obligated to pay the subcontractor unless or until the contractor gets paid by the Owner/Government. These will not be construed to allow for non-payment by a contractor if they are not written so as to specifically create a condition precedent to payment by the general contractor. Federal Ins. Co. v. I. Kruger, Inc., 829 So. 2d 732 (Ala. 2002); but see, James E. Watts and Sons Contractors v. Nabors, 484 So.2d 373 (Ala. 1985) (finding clause enforceable under Alabama law if the clause can be said to be a dependant covenant).