• The Construction Lien Act specifically prohibits any contractual requirement that a prospective lien claimant waive its lien in advance of the performance of the work and declares such requirement to be unenforceable as against public policy [MCL 570.1115(1)].
• lien claimant who has been paid in full must provide the owner, lessee or designee with a Full Unconditional Waiver.[ MCL 570.1115(2).
• "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. A Pay-if-paid clause would create a condition precedent if the language were sufficiently clear.

Retainage Provisions

Public

• The maximum rate of retainage may not exceed 10 percent of each progress payment. MICH. COMP. LAWS§125.1563(2)(a). If progress is satisfactory, the retainage may be reduced when 50 percent of the work is complete. If the public entity determines that the contractor's performance is acceptable, it may retain not more than 10 percent of the dollar value of work after the 50 percent level. MICH. COMP. LAWS§125.1563(2)(b). Retained funds must be placed in an interest-bearing account and paid to the contractor as part of the final payment. MICH. COMP. LAWS§ 125.1563(3). When a delay in completion is the result of the contractor, all interest earned on retained funds becomes the property of the awarding entity. MICH. COMP. LAWS§ 125.1564. When 94 percent or more of the work under the contract is in place, and at the request of the original contractor, the public agency shall release the retainage, plus interest, to the original contractor.  This is only to be done if the original contractor provides to the public agency an irrevocable letter of credit, in the amount of the retainage and interest, containing terms mutually acceptable to the contractor and the public agency. MICH. COMP. LAWS§ 125.1563.