Mark pay-when-paid provisions in a construction contract
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- From the construction contract, quote each sentence that conditions a payment to a subcontractor on the owner or the contractor receiving payment. Name the regime the lawyer marks: a Virginia private construction contract, or a Virginia public contract. Record the insolvency and bankruptcy exception only where the private section states it. Write no replacement clause and do not say the sentence is unenforceable.
- What the lawyer must review
- Virginia Code § 11-4.6 applies to a construction contract with an owner, and an owner under that section is a person other than a public body. In a contract that has at least one general contractor and one subcontractor, payment by the party contracting with the contractor shall not be a condition precedent to payment to any subcontractor, regardless of that contractor receiving payment, unless the party contracting with the contractor is insolvent or a debtor in bankruptcy as defined in § 50-73.79. Any provision in a contract contrary to § 11-4.6 is unenforceable. Virginia Code § 2.2-4354 applies to a contract awarded by a state agency, or by an agency of local government in accordance with § 2.2-4352. Under that section, payment by the party contracting with the contractor shall not be a condition precedent to payment to any lower-tier subcontractor, and any provision in a construction contract contrary to the section is unenforceable. The public section, as opened, does not state the insolvency exception. You decide which statute applies and whether the quoted sentence is contrary to it. These two Virginia sections are not a rule for every other state.
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Do not begin AI assistance until the responsible lawyer has defined and confirmed its permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Trace every relied-on figure to its source, confirm dates and assumptions, and independently recalculate totals or derived amounts.
- Review operative clauses in the complete document, including definitions, cross-references, schedules and inconsistencies with the instructions.
- Verify the applicable jurisdiction and the version of each relevant law, rule or instrument in force at the material time.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.