Pay-if-paid clauses condition a subcontractor's right to payment on the general contractor receiving payment from the owner. Texas courts enforce them when the language clearly establishes payment as a condition precedent.
The cases below are organized by outcome and significance. Flagship cases represent the most-cited opinions that have shaped how pay-if-paid clauses are interpreted in Texas courts.
A surety does not owe a common law duty of good faith to its principal, but good faith is a contractual condition precedent to indemnification, requiring proof of improper motive or willful ignorance rather than mere negligence.
Section 2.306 of the UCC does not apply to take-or-pay gas contracts where parties have specified quantity as a determinable amount (85% of delivery capacity), and good faith obligations remain applicable to increases in delivery capacity.
A law firm may recover the reasonable value of its services under quantum meruit despite lacking a signed contingent-fee agreement, but an expert's damages opinion improperly based on the unenforceable agreement cannot support the award.
14 opinions sorted by most cited
| CASE | CITATION | OUTCOME | CITES |
|---|---|---|---|
| Associated Indemnity Corp. v. CAT Contracting, Inc. Texas Supreme Court | 964 S.W.2d 276 (1998) | modified | 765 |
| Lenape Resources Corp. v. Tennessee Gas Pipeline Co. Texas Supreme Court | 925 S.W.2d 565 (1996) | enforced | 252 |
| Albert G. Hill, Jr. v. Shamoun & Norman, Llp Texas Supreme Court | 544 S.W.3d 724 (2018) | remanded | 108 |
| HECI Exploration Co. v. Clajon Gas Co. Court of Appeals of Texas | 843 S.W.2d 622 (1993) | remanded | 90 |
| MidAmerica Construction Management, Inc. v. MasTec North America, Inc. Court of Appeals for the Tenth Circuit | 436 F.3d 1257 (2006) | enforced | 61 |
| Hassell Const. Co., Inc. v. Stature Commercial Co. Texas Court of Appeals, 14th District (Houston) | 162 S.W.3d 664 (2005) | reversed | 54 |
| United States ex rel. Tusco, Inc. v. Clark Construction Group, LLC District Court, D. Maryland | 235 F. Supp. 3d 745 (2016) | enforced | 32 |
| Acierno v. Worthy Brothers Pipeline Corp. Supreme Court of Delaware | 656 A.2d 1085 (1995) | remanded | 19 |
| Urban Masonry Corp. v. N&N Contractors, Inc. District of Columbia Court of Appeals | 676 A.2d 26 (1996) | remanded | 13 |
| Levco Constr., Inc. v. Whole Foods Mkt. Rocky Mountain/Sw. L.P. Court of Appeals of Texas | 549 S.W.3d 618 (2017) | enforced | 9 |
| United States ex rel. Kitchens to Go v. John C. Grimberg Co. District Court, E.D. Virginia | 283 F. Supp. 3d 476 (2017) | modified | 5 |
| Evans, Mechwart, Hambleton & Tilton, Inc. v. Triad Architects, Ltd. Ohio Court of Appeals | 196 Ohio App. 3d 784 (2011) | reversed | 2 |
| Highland Crossing, Lp v. Ken Laster Co. Court of Civil Appeals of Oklahoma | 2010 OK CIV APP 124 (2010) | enforced | 1 |
| In re Makwa Builders, LLC United States Bankruptcy Court, D. New Mexico | 545 B.R. 311 (2016) | modified | 0 |