A 'pay when paid' clause in a building subcontract, making the subcontractor's right to payment dependent on the contractor receiving payment from the proprietor, does not defeat a quantum meruit claim by the subcontractor following termination of the contract for the contractor's repudiation. The contractual terms are evidence only in assessing reasonable remuneration and do not impose a ceiling on recovery. Such clauses, properly construed in context, may be limited to progress payments rather than extending to the final payment or contract sum. Where the contractor repudiates and the proprietor is insolvent, the subcontractor's damages claim may be nominal (because the right to payment depended on the proprietor paying), but the quantum meruit claim remains available at the full reasonable value of the work done.
The full text is available to signed-in members, including the 13 later cases that cite this judgment.