Contingent payment
A payment obligation that requires fulfilment of specific conditions.
Contingent payment clauses shift the risk of non-payment to subcontractors, which can lead to cash flow problems for smaller companies. Understanding these clauses is critical, as they affect the timing and certainty of payment. Negotiating terms that ensure fair risk distribution is essential for maintaining business viability.
Used in a sentence
The subcontract includes a contingent payment clause, so payment depends on us getting paid first.
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