A contractor submits a progress payment application for $12,000 on a public works project. Under California prompt payment law, within how many days must the public entity pay or provide written notice of disputed amounts?
Correct Answer
A) 30 days
California prompt payment law requires public entities to pay undisputed progress payments within 30 days.
Why This Is the Correct Answer
California's prompt payment law (Public Contract Code §20104.50) requires public entities to pay undisputed progress payment applications within 30 days of receipt, or to provide written notice of any disputed amounts within that same period. Failure to pay within 30 days triggers penalty interest on the unpaid amount.
Why the Other Options Are Wrong
Option B: 15 days
15 days is incorrect. While some private project prompt payment rules involve shorter windows for certain sub-tiers, the public entity standard for progress payments is 30 days, not 15.
Option C: 60 days
60 days is incorrect and would give public entities an unreasonably long time to process payment applications. The 30-day rule exists precisely to prevent government agencies from using extended payment delays to manage cash flow at contractors' expense.
Option D: 45 days
45 days is incorrect. 45 days is not a threshold recognized under California's public works prompt payment statute. This is a common distractor that falls between the correct answer (30 days) and the incorrect 60-day option.
Memory Technique
Public works prompt payment: '30 days = one month.' Think of it as a standard monthly billing cycle. If a government agency hasn't paid or disputed within one calendar month of receiving the payment application, penalty interest starts accruing. '30 days or dispute in writing' is the rule.
More California Questions
A homeowner signs a $15,000 home improvement contract on Monday at 2 PM at the contractor's office. Under California law, what is the latest time the homeowner can cancel the contract without penalty?
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Under California's prompt payment law, if a contractor submits a proper payment request to a property owner, payment is due within how many days?
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