Hey {{first_name | default: "there"}},
There's a clause in almost every subcontract that subs sign without reading.
They're busy. They want to get started. The GC's contract looks like every other one they've signed. So they initial the pages and get to work.
Then, 90 days later, they're chasing payment and someone points them to Section 4.3.
THE LESSON
Pay-when-paid is everywhere. Most subs know it exists. What they don't do is read how their specific contract defines it — and that difference is everything.
The weak version says the GC will pay the sub within a reasonable time after receiving payment from the owner. That's annoying but manageable. Courts in most states read this as a timing clause, not a condition of payment.
The strong version — pay-if-paid — says the GC's receipt of payment from the owner is a condition precedent to any obligation to pay the sub. If the owner doesn't pay, the GC doesn't owe the sub anything. Courts enforce this in many states. Subs have signed away their right to payment entirely.
I've seen subs sign pay-if-paid clauses on jobs where the GC knew the owner was in financial trouble. The GC got protection. The sub got nothing.
The fix takes about 30 seconds during contract review. Find the payment clause. Read it closely. If it says "condition precedent" or "contingent upon" receipt of payment — that's the dangerous version. Push to strike it or convert it to a timing clause before you sign. Once you're on the job, that negotiating window is closed.
THE TOOL
Before you open the Contract Analyzer, do one thing: identify every clause in the contract that touches money. Payment terms, retainage, backcharges, indemnity, insurance. Those are the sections worth analyzing — not the boilerplate about notices or the definitions section. Knowing what you're looking for before you paste the contract means you're asking the right questions instead of hoping the AI finds the problems for you.
The Contract Analyzer workflow is built for exactly this. Paste the subcontract, tell it you want the payment clause analyzed — specifically whether it's pay-when-paid or pay-if-paid, what triggers the condition, and what your options are. It flags which version you have, explains what you've agreed to in plain language, and tells you what to push back on before you sign.
It specifically flags pay-if-paid as a red flag even when it's "industry standard." Standard doesn't mean safe.
If you've got a subcontract in front of you and you're not sure — run it through the analyzer first. Then take anything it flags to a construction attorney in your state. You'll walk into that conversation already knowing what the problem is.
Get the full toolkit at https://jessgregg.gumroad.com/l/pmedgetoolkit — $29, lifetime updates.
INDUSTRY PULSE
On my radar:
• AI contract review is moving downstream — Tools that used to cost enterprise-level subscriptions are now accessible to small GCs and subs. The firms using them are catching bad clauses before signing. The ones not using them are learning the hard way.
• Retainage reform is gaining traction — Several states are moving toward mandatory retainage release schedules tied to percent complete rather than final completion. If you do work in multiple states, pay attention — this changes your cash flow math significantly.
• The RFI backlog problem isn't going away — Projects with high RFI volumes are seeing average response times stretch past 14 days on some design teams. Document every day of outstanding RFIs. That backlog is your schedule impact claim waiting to be built.
If you've got a subcontract in front of you right now with language you're not sure about — forward it to a construction attorney in your state before you sign.
And if you want a faster first pass before that call, the Contract Analyzer can tell you where to look.
— Jesse
The PM Edge | pmedge.io