• Connecticut’s "Act Concerning Fairness in Financing in the Construction Industry" makes void any provision in a construction contract or any periodic lien waiver issued according to a construction contract that waives a contractor’s or supplier’s right to claim a mechanic’s lien for services or materials that have not been performed or supplied and paid for.
• A pay-if-paid clause also will not waive the rights of a contractor, subcontractor or supplier to claim a mechanic’s lien.
• “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 create a condition precedent to payment.

Retainage Provisions

Public

• Connecticut General Statutes 49-41b - Release of payments on construction projects. When any public work is awarded by a contract for which a payment bond is required, except the Department of Transportation, the maximum rate of retainage is 10 percent.  In the case of a contract advertised by the state Department of Transportation, the department the public body shall not withhold more than 2.5 percent of a periodic or final payment. Additionally, a contractor shall not withhold more than 2.5 percent from a subcontractor. CONN. GEN. STAT. § 49-41b(2).  For contracts awarded by municipalities, the maximum rate of retainage is 5 percent.  Additionally, a contractor shall not withhold more than 5 percent from a subcontractor. CONN. GEN. STAT. § 49-41b(3). The contractor or subcontractor may substitute securities in lieu of retainage. CONN. GEN. STAT. § 3-112a.

Private

• Connecticut General Statutes 42-158k - Retainage limitation.  No construction contract may provide for any retainage in an amount that exceeds seven and one-half per cent of the estimated amount of a progress payment for the life of the construction project.
• HB7073 signed 7/5/2017 – Owner must pay retainage within 30 days of issuance of final completion or written acceptance of the project by owner.