California prompt payment laws are designed primarily to:
Explanation
Prompt payment statutes do one thing: they put deadlines on money moving down the contracting chain, with penalties for missing them. Civil Code §8800 gives a private owner 30 days after a demand for payment under the contract to pay the direct contractor, at a 2% per month penalty on anything wrongfully withheld; B&P §7108.5 gives a direct contractor 7 days from a progress payment to pay each subcontractor; Civil Code §8814 gives 10 days for passing retention through. Prevailing wage rates are set by the DIR, the award of a bid turns on the bidding statutes, and the 5% retention cap is Civil Code §8811 - none of those are prompt-payment rules.
Law Reference: Civil Code §8800; B&P Code §7108.5; Civil Code §8814; Civil Code §8811This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
Practice all 1632 questions free — no signup required.
Own the complete CSLB Law & Business guide — PDF + EPUB, $24.99 →
Related questions on this topic
- On a fixed-price contract, the contractor's estimate was $100,000 but actual costs reached $112,000. The owner still pays only the agreed price. The contractor's profit or loss is:
- If a contractor performs home improvement work without a written contract or with a noncompliant contract, the most likely consequence is:
- An owner asks a contractor to add an unforeseen scope of work mid-project. To be paid for the extra work, the contractor should FIRST:
- A contractor wishes to require a larger down payment than the law allows because a custom-ordered material must be paid for up front. The proper way to handle this is to:
- A contractor's overhead is best described as:
- On a home improvement contract, the start date and completion date provisions exist primarily to:
Last reviewed: · editorial process