a law corporation
Joseph W. McCarthy
Prompt Payment Statutes
California has several statutes that deal with prompt payment from the owner to the prime and from the prime to the sub ("the prompt payment statutes"). The prompt payment statutes include both progress payments and retention, and most of the prompt payment statutes provide for interest, attorney fees and costs.
The problem with the prompt payment statutes is that they do not apply in the case of a "good faith dispute". It does not take much for the court to classify the dispute as a good faith dispute. In a good faith dispute an owner can withhold 150% of the disputed amount from the prime, and the prime can withhold 150% of the disputed amount from the sub.
Click the icon below for a PDF chart of the prompt payment statutes.