## Facts

- A general contractor (VCC) hired a drywall subcontractor (Triad) for work on a commercial shopping center project.
- The subcontract contained a pay-if-paid clause stating VCC’s payment duty was “expressly and unequivocally contingent upon” the owner’s acceptance of Triad’s work and the owner’s payment to VCC for that work, except where nonpayment resulted from VCC’s own default unrelated to Triad’s performance.
- The clause also stated Triad relied on the owner’s credit, not VCC’s, and assumed the risk of owner nonpayment.
- VCC paid Triad’s first three pay applications after receiving owner payment, and later paid a fourth application despite receiving only partial owner payment.
- The owner then stopped paying and later filed bankruptcy; Triad continued working and submitted additional applications totaling roughly $465,888.
- VCC refused to pay the later applications, citing the pay-if-paid clause and the owner’s nonpayment.
- Triad contended VCC waived the clause based on an alleged oral assurance by VCC’s project manager to “keep working” and that VCC would pay Triad “out of its own pocket” if necessary, plus the prior payment of the fourth application.
- Triad’s representatives knew of the pay-if-paid clause, believed it remained in effect, and repeatedly asked whether the owner had paid VCC; there was no written modification of payment terms.

## Issues

1. Whether evidence supported a finding that VCC waived the subcontract’s pay-if-paid provision, making VCC liable to Triad despite the owner’s nonpayment.
2. Whether, given the appellate disposition on waiver, Triad’s contingent cross-appeal issues remained justiciable.

## Decision

- The court reversed the judgment for Triad and directed entry of judgment for VCC.
- The court held there was no legally sufficient evidence that VCC waived the pay-if-paid clause.
- The court concluded the alleged oral assurance was too vague and isolated to show a clear, intentional relinquishment of VCC’s contractual right.
- The court held that paying one application without full owner payment was, at most, a single accommodation and did not constitute waiver of the condition precedent for future payments.
- Triad’s cross-appeal was dismissed as moot.

## Legal Principles

- A pay-if-paid clause drafted with clear conditional language and explicit risk allocation to the subcontractor is enforceable as a condition precedent to the contractor’s payment obligation.
- Waiver is the voluntary relinquishment of a known right; implied waiver requires conduct so clearly indicating intent to relinquish the right that no other reasonable explanation is possible.
- Waiver must be shown by clear, decisive, and unequivocal evidence; ambiguous statements, “slight circumstances,” or speculative inferences are insufficient.
- A temporary or partial deviation from strict contractual performance, without unequivocal intent or written modification, does not establish a permanent waiver of contractual protections.

## Conclusion

The court enforced the subcontract’s pay-if-paid condition precedent and held that neither an alleged oral reassurance nor a single payment made without full owner funding constituted clear and unmistakable waiver; because the owner did not pay VCC and no qualifying VCC default was shown, Triad could not recover from VCC.


Vratsinas Construction Co. v. Triad Drywall, LLC, 321 Ga. App. 451 (2013)