Contracts & ExecutionQuestion 537 of 690
A prime contractor receives a $200,000 progress payment from the owner. The subcontract calls for $40,000 to a plumbing sub for completed work that was approved in the payment. Under B&P §7108.5, the prime must pay the sub within how many days of receipt?
a.Within 30 days
b.Within 21 days
c.Within 15 business days
d.Within 7 days, or face a 2% per month penalty
Explanation
B&P §7108.5 requires a prime contractor to pay each subcontractor its proportionate share of any progress payment within 7 days of receipt from the owner. Wrongful withholding may trigger a 2% per month penalty plus attorney fees.
Law Reference: Bus. & Prof. Code §7108.5Practice all 690 questions free — no signup required.
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