Court Uncourt Magazine - Volume V Issue 12

In this issue

Let us consider a situation, where a contractor takes up a project for 100 villas from a client, and subsequently hires a subcontractor to work on 20 villas. However, upon completion of the project, the client refuses to make the payments on time, while the sub-contractor demands payment for the work done by him. In such a situation, the contractor would be forced to make the payment to the sub-contractor out of his own pocket. This is where the Pay-when-Paid clause comes into play. Under this clause, the contractor is not required to pay the sub-contractor, unless and until, the contractor receives the payment from the client. The Pay-when-Paid clause usually refers to the period within which a general contractor is required to pay a sub-contractor. This clause also guarantees the protection of the interest of the subcontractor, where the contractor has to clear the payments within a reasonable time, irrespective of whether the client makes the payments or not. Without such a guarantee, the clause would be unenforceable and would be equivalent to Pay-if-Paid. Therefore, Pay-if-Paid and Pay-when-Paid clauses are mechanisms adopted by the contractors to secure their interests in a construction project and to ensure clarity with regards to payment within the concerned contract.
In this issue of Court Uncourt, our lawyers will elaborate on the broad range of legal matters including Pay-when-Paid and Pay-if-Paid in the UAE, DFSA Regulations on Crowdfunding, B2B Dispute Resolution Procedure in the UAE, Good Samaritan Law, Customs Duty in India, Developments in Abu Dhabi Health Sector, and Mersin Free Trade Zone. Through this information outlet, we intend to keep our readers updated on the latest legal developments around the world. Thank you, and we hope you have an insightful read of this issue of Court Uncourt.