Contracts & ExecutionQuestion 71 of 1632

On a private project, a direct (general) contractor receives a progress payment from the owner. Within how many days must it pay each subcontractor that subcontractor's share?

a.3 days
b.7 days
c.10 days
d.30 days

Explanation

B&P §7108.5 gives the direct contractor 7 days from receipt of a progress payment to pass each subcontractor its share (b), and §7108.5(b) charges a 2%-per-month penalty plus attorney's fees on amounts wrongfully withheld. (c) 10 days is the separate deadline in Civil Code §8814 for releasing withheld RETENTION to a subcontractor once the owner releases it — a different payment under a different statute, which is why the stem names the progress payment. (a) 3 days and (d) 30 days appear in neither section; 30 days is the kind of term a private contract might try to impose, but §7108.5 cannot be bargained down to it.

Law Reference: Bus. & Prof. Code §7108.5

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