Which clause is considered a Condition Precedent?

A Clause that establishes a Condition Precedent is one that outlines a requirement or event that must occur before a specific obligation or action is triggered. In this case, the clause stating that "the Sub will be paid when the Contractor is paid" specifies that the subcontractor’s right to payment is contingent upon the contractor receiving payment first. This creates a direct dependency; the subcontractor’s payment is not only conditional but is explicitly linked to the contractor's financial transaction, which must occur prior.

The other statements provide important information related to payment terms but do not establish conditions that must be met prior to an obligation. For example, stipulating that payment is due upon completion of work outlines the timing of payment without creating a dependency on another event. Similarly, stating that the contractor will not be held liable for delays does not establish a condition for another obligation, and the final payment being made after project approval indicates a sequential process rather than a condition that must be met beforehand. Thus, option A correctly identifies a Condition Precedent due to its nature of dependency on another event.