## Facts

- Peacock Construction Company, Inc. was the general contractor on a condominium project.
- Peacock entered written subcontracts with Modern Air Conditioning, Inc. and Overly Manufacturing Company; each contained the same final payment clause.
- The clause stated the subcontractor would be paid “within 30 days after the completion of the work … written acceptance by the Architect and full payment therefor by the Owner.”
- Modern and Overly completed their work without deficiencies and demanded final payment.
- Peacock refused to pay, asserting the owner had not fully paid Peacock and had gone into bankruptcy.
- The subcontractors sued for breach of contract and obtained summary judgment in the trial court; the district court of appeal affirmed.
- The Florida Supreme Court accepted review to resolve conflict over whether such language creates a condition precedent to payment.

## Issues

1. Whether a subcontract clause providing for final payment after completion, architect acceptance, and “full payment … by the Owner” makes owner payment a condition precedent to the contractor’s duty to pay the subcontractor.
2. Whether the clause instead creates an absolute promise to pay, using owner payment only to set the time for payment within a reasonable period.

## Decision

- The court held the clause did not make owner payment a condition precedent to Peacock’s obligation to pay the subcontractors.
- The clause was construed as an absolute promise to pay, with owner payment functioning only as a timing provision.
- The court treated interpretation of the written subcontract provision as a question of law suitable for summary judgment in this type of standardized commercial transaction.
- The court affirmed the judgments requiring Peacock to pay Modern and Overly despite the owner’s nonpayment.

## Legal Principles

- Interpretation of a written contract provision in a common, standardized commercial setting is a question of law for the court.
- “Pay-when-paid” language generally fixes the time for payment and does not shift the risk of owner nonpayment to the subcontractor.
- A contractor may make owner payment a true condition precedent only through clear and unequivocal conditional language; ambiguity is construed against creating a condition that would defeat payment after performance.
- Absent unmistakable risk-shifting language, the risk of owner insolvency or refusal to pay is borne by the general contractor, not the subcontractor.

## Conclusion

The court affirmed summary judgment for the subcontractors, holding that the final payment clause did not condition payment on the owner’s payment but merely set a reasonable time for payment, leaving the general contractor responsible for subcontractor payment even when the owner failed to pay.


Peacock Constr. Co. v. Modern Air Conditioning, Inc., 353 So. 2d 840 (Fla. 1977)