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In October, the Nevada Supreme Court revisited the enforceability of pay-if-paid clauses in construction contracts. Despite being enacted nearly two decades ago and being amended several times since, the Nevada Prompt Payment Act still garners differing opinions regarding the enforceability of pay-if-paid clauses, which the Nevada Supreme Court held requires a case-by-case analysis.
In broad terms, the Nevada Prompt Payment Act requires compliance with contractual terms of construction agreements and provides reasonable terms when specific terms are either missing or violate the statute. Specifically, NRS 624.628(3) protects a subcontractor’s statutory rights from modification by contract. The provision provides that: