A general contractor hires a plumbing subcontractor for $15,000. The subcontractor completes work on June 1st and submits an invoice. The general contractor receives payment from the owner on June 20th. By what date must the general contractor pay the subcontractor?
Correct Answer
B) July 27th (7 days after receiving payment)
Under California's prompt payment law, when a contractor receives payment from the owner, they must pay subcontractors within 7 days of receiving that payment.
Why This Is the Correct Answer
California Civil Code requires general contractors to pay subcontractors within 7 days of receiving payment from the owner. Payment received June 20 + 7 days = July 27th is the payment deadline.
Why the Other Options Are Wrong
Option A: July 20th (30 days after receiving payment)
July 20th reflects a 30-day window, which is not the California standard for GC-to-subcontractor payments. Thirty days is sometimes used in other payment contexts, but the sub-tier prompt payment rule is 7 days.
Option C: June 30th (10 days after receiving payment)
June 30th (10 days after receipt) is not the legal standard. Ten days does not appear in California's prompt payment statute for this payment tier.
Option D: July 1st (30 days after work completion)
July 1st counts 30 days from work completion, not from receipt of payment. California's prompt payment law measures from when the GC is paid by the owner — not from when the sub finishes work.
Memory Technique
Owner pays GC → GC has a '7-day sprint' to pay subs. Think of it as 'one week to pass the money down the chain.'
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?
A swimming pool contract for $28,000 is signed on Wednesday at the customer's home. The contract includes proper cancellation notices. If the customer wants to cancel, they must do so by when?
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?
A general contractor hires a subcontractor for $22,000. The general contractor receives payment from the owner but fails to pay the subcontractor within how many days, subjecting themselves to penalty interest?
Under California Civil Code Section 8180, when must a subcontractor serve a preliminary notice on a private work project?
Which of the following contracts is NOT subject to the 3-day right to cancel under California law?
A subcontractor completes roofing work on Tuesday, March 15th. The general contractor is paid by the owner on Friday, March 25th. Under California prompt payment laws, what is the latest date the general contractor must pay the subcontractor?
A contractor receives a progress payment of $18,000 from a property owner on Monday. The contractor owes subcontractors $12,000 of this amount. By what day must the contractor pay the subcontractors?
A swimming pool contractor enters into a $45,000 contract to install an in-ground pool. The contract includes a $5,000 down payment. What is the maximum down payment the contractor can legally collect under California law?
A contractor completes $15,000 worth of electrical work on a commercial building. The property owner disputes $3,000 of the charges. Under California prompt payment law, what amount must the owner pay within the required timeframe to avoid penalties?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Contract Administration
60 questions · 70% to pass
Project Management
60 questions · 70% to pass
Related Study Resources
Previous Question
Which of the following contracts would NOT be subject to the 3-day right to cancel under California law?
Next Question
A subcontractor completes roofing work on Tuesday, March 15th. The general contractor is paid by the owner on Friday, March 25th. Under California prompt payment laws, what is the latest date the general contractor must pay the subcontractor?