EMH & T, a civil engineering subcontractor, sued Triad Architects for payment under two contracts containing pay-when-paid clauses. The contracts stated the architect would pay the subcontractor only after the owner paid the architect. When the owner didn't pay, Triad refused to pay EMH & T. Ohio's Court of Appeals ruled that pay-when-paid clauses are timing mechanisms, not excuses to avoid payment entirely. The contractor must pay the subcontractor within a reasonable time regardless of whether the owner has paid.
Pay-when-paid clauses don't eliminate your right to payment—they just delay when payment is due. The contractor still owes you money.
If the contractor hasn't received owner payment, they must still pay you within a reasonable time. You're not stuck waiting indefinitely.