New Virginia Law Bans Contingent Payment Provisions in Construction Contracts

September 2, 2022

Cohen Seglias reports that a new bill has been signed into law in Virginia that prohibits the use of contingent payment provisions on construction projects. The new law amends VA ST §§ 2.2-4354 and 11-4.6 and provides that “[p]ayment by the party contracting with the contractor shall not be a condition precedent to payment to any lower-tier subcontractor, regardless of that contractor receiving payment for amounts owed to that contractor.” In other words, Virginia will no longer permit “pay-if-paid” provisions in construction contracts.

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