Florida recognizes two types of contingent payments clauses- pay-when-paid clauses and pay-if-paid clauses. These two clauses have very different legal effects. 

A pay-when-paid clause links the timing of the contractor’s obligation to make payment to the subcontractor to the time when payment is made to the contractor by the owner.  A pay-when-paid clause does not relieve the contractor of the contractual obligation to ultimately pay the subcontractor.  Instead, under a pay-when-paid clause, the contractor is ultimately required to pay the subcontractor within a “reasonable time” of the subcontractor’s completion of its work, even if the contractor does not ever receive payment from the owner.  What constitutes such a “reasonable time” is not clear cut and can vary greatly depending on the facts and circumstances of your case. 

Alternatively, a pay-if-paid clause makes the contractor’s obligation to pay the subcontractor entirely conditional on the contractor first receiving payment from the owner.  A pay-if-paid clauses shift the risk of the owner’s nonpayment from the contractor to the subcontractor, so that if the owner never pays the contractor, the contractor has no legal obligation to ever pay the subcontractor.

Contingent Payment Clauses are enforceable in Florida. 

In Florida, the courts will generally only enforce a pay-if-paid clause as written if it uses words expressly making payment from the owner a “condition” or a “condition precedent” to the contractor’s obligation to pay the subcontractor, or if it expressly states the contractor’s payment obligation is “contingent” upon the contractor receiving payment from the owner.  Without language clearly and unequivocally expressing the intent to shift the risk of owner nonpayment to the subcontractor, Florida courts will construe the clause as simply creating an obligation for the contractor to pay the subcontractor within a reasonable time of the subcontractor’s work, i.e. as a pay-when-paid clause.