New law protects subcontractors from contingent payment clauses

Articles & Publications

August 10, 2007

The Prompt Pay Act (Senate Bill 324) or contingency pay bill was signed into law this summer by Texas Governor Rick Perry. The law precludes general contractors from relying on contingent payment clauses in certain construction contracts to deny payment to subcontractors for work performed in accordance with the contract. The new law governs the enforceability of such construction contract provisions entered into on or after September 1, 2007.

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