## Facts

- An architect (Triad) had prime contracts with a developer (Centurion) for a residential development and a condominium project.
- Triad retained a civil-engineering firm (EMH&T) as its consultant on both projects and executed two written consultant agreements: one for $128,550 and another for $60,200.
- The agreements incorporated an AIA standard architect–consultant form and included payment language stating the consultant would be paid promptly after the architect was paid by the owner, in proportion to amounts received attributable to the consultant’s services.
- The parties also added a clause requiring payment to the consultant within ten working days after the architect’s receipt of owner payment for the consultant’s services.
- EMH&T substantially completed its contracted services by December 11, 2007, and invoiced Triad $150,482.29.
- Centurion cancelled both projects and did not pay Triad; Triad did not pay EMH&T, asserting it had no duty to pay unless it first received payment from Centurion.

## Issues

1. Whether the consultant payment provisions created a pay-if-paid condition precedent that excused Triad’s payment obligation when the owner did not pay.
2. If the provisions were instead pay-when-paid terms, whether a reasonable time for payment had elapsed such that Triad’s duty to pay EMH&T had matured despite owner nonpayment.

## Decision

- The court of appeals reversed summary judgment for Triad and remanded.
- The court held the contract language functioned as a pay-when-paid timing mechanism, not a pay-if-paid condition precedent.
- Because EMH&T had substantially performed and a reasonable time had passed, Triad remained obligated to pay even though Centurion never paid Triad.

## Legal Principles

- A pay-when-paid clause generally postpones payment for a reasonable time to allow the contractor to seek owner payment; after that period, the contractor must pay regardless of owner payment.
- A pay-if-paid clause shifts the risk of owner nonpayment to the subcontractor/consultant only if the contract uses clear, unequivocal language making owner payment an express condition precedent (e.g., “only if,” “condition precedent,” or equivalent).
- Contract terms that state payment will be made “after” owner payment or within a set number of days “after receipt” of owner payment, without explicit condition-precedent language, are ordinarily construed as timing provisions rather than risk-shifting conditions.
- Ambiguous provisions purporting to cause forfeiture or transfer major nonpayment risk are construed against the party seeking to avoid payment obligations.

## Conclusion

The appellate court construed the architect–consultant payment provisions as pay-when-paid terms that delayed payment only for a reasonable time, not as a pay-if-paid condition precedent; therefore, the architect’s nonpayment defense based solely on the owner’s nonpayment failed, and the case was remanded for further proceedings.


Evans, Mechwart, Hambleton & Tilton, Inc. v. Triad Architects, Ltd., 965 N.E.2d 1007 (Ohio Ct. App. 2011)