If I am a subcontractor and made to wait for payment because the general contractors won’t pay until they’re paid by homeowners, is this legal?

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If I am a subcontractor and made to wait for payment because the general contractors won’t pay until they’re paid by homeowners, is this legal?

Sometimes wait up to 5 months.

Asked on January 8, 2012 under Business Law, Colorado

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It depends entirely on the terms under which you are working. If the terms are payable upon invoice, payable within net 30, etc., then you should be paid according to those terms. If the terms are that you are payable after the GC is paid, that's legal, too--it's a function of what you and the GC agreed to. In the event you and the GC disagree about what the terms are, you could sue and try to prove in court that your interpretation is the correct one. Also, going forward, if you don't have clear payment terms built into your subcontractor agreement(s), invoices, etc., you can help avoid future disputes by making your payment terms explicit, in writing.


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