West-Fair Elec. Contractors v. Aetna Casualty & Surety Co.,
78 F.3d 61, 1996 U.S. App. LEXIS 3912 (2d Cir. March 6, 1996).
Neither general contractor nor surety could assert pay-when-paid clause as defense to payment claim by subcontractor because clause, which operated as a condition precedent to payment, constituted a prospective waiver of lien rights and therefore violated New York Lien Law. 
Defendant Gilbane Construction Co. (“General Contractor”) was the general contractor on a construction project in White Plains, NY. General Contractor hired plaintiff L.J. Coppola, Inc. (“Subcontractor”) to perform a portion of the work. General Contractor maintained a payment bond with defendant Aetna Casualty and Surety Co. (“Surety”) for the benefit of all its subcontractors.
Continue Reading Second Circuit Holds That Pay-When-Paid Clause Violates Public Policy Expressed in New York Lien Law