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Are Pay-When-Paid Clauses Still Valid Under Ontario’s Prompt Payment Laws?
In Ontario construction contracts, payment timelines have always been a contentious issue, especially when general contractors insert pay-when-paid clauses into agreements with subcontractors. These clauses typically state that the contractor will not pay the subcontractor until the contractor themself has been paid by the project owner. While that may seem like a fair approach to protect against cash flow crunches, it often leaves subcontractors stuck waiting for payment—sometimes indefinitely—even after they have completed their work.

