Southern States Masonry, Inc. v. J.A. Jones Construction Company
Supreme Court of Louisiana
507 So. 2d 198 (1987)
After the Louisiana World Exposition (LWE), owner of the 1984 World's Fair, went bankrupt and failed to pay its general contractors, J.A. Jones Construction (defendant) and Landis Construction each relied on 'pay-when-paid' clauses in their own subcontracts — which conditioned payment to subcontractors Southern States Masonry (plaintiff) and Strahan Painting on the general contractors first being paid by LWE — to permanently withhold payment for work LWE never paid for. Southern and Strahan sued their respective general contractors; the trial courts split on the issue, the courts of appeal reached inconsistent results, and the Louisiana Supreme Court granted review.
Whether a pay-when-paid clause may make payment by an owner a condition of payment to a subcontractor.