A contingent payment clause may be worded similar to the following:
8.2.5 TIME OF PAYMENT Receipt of payment by the Contractor from the Owner for the Subcontract Work is a condition precedent to payment by the Contractor to the Subcontractor. The Subcontractor hereby acknowledges that it relies on the credit of the Owner, not the Contractor for payment of Subcontract Work. Progress payments received from the Owner for the Subcontractor for satisfactory performance of the Subcontract Work shall be made no later than seven (7) days after receipt by the Contractor of payment from the Owner for the Subcontract Work.
The transfer of risk, however, has real business consequences, which hold true in most factual scenarios. The passing of risk to the subcontractor generally allows the subcontractor to charge more for his services, as the risk of non-payment must be combined with the actual service and materials charge for an increased new price. Thus, the charge for non-payment risk can be calculated by subtracting the overall charge to the general contractor minus the charges for services and materials.