• Waivers of construction lien rights are against public policy, unlawful, and void, unless given in consideration for payment. N.J.S.A. 2A:44A-38.
• Waivers are effective only upon and to the extent that such payment is actually received. N.J.S.A. 2A:44A-38.
• "Paid if Paid" is enforced if explicit.
• "Pay when Paid" suggests time for payment.
• Pay-when-paid clause in the subcontract or purchase order does not create a condition precedent to payment.

Retainage Provisions

Public

• For highway work, 2 percent retainage shall be withheld. Upon substantial completion, 1 percent shall be withheld. If work is not progressing, as defined by the New Jersey Department of Transportation Standard Specifications for Road and Bridge Construction, 4 percent may be withheld. The contractor may substitute securities in lieu of retainage. N.J. STAT. ANN. § 27:7-34.  For municipalities and counties, the rate of retainage is also 2 percent; upon substantial competition, 1 percent shall be withheld. N.J. STAT. ANN. § 40A:11-16.3. For Board of Education projects, 5 percent retainage is held if there is no performance bond. If there is a performance bond, then 2 percent retainage is held when the outstanding contract balance exceeds $500,000 and 5 percent is held when the outstanding contract balance is less than $500,000. N.J. STAT. ANN. §18A:18A-40.3.