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Construction law

prompt payment statutes

Prompt payment statutes are laws that require the payment of contractors and subcontractors within a certain period of time, and prescribe interest and penalties for late payments. In some states these laws only apply to public works construction projects that are funded by the government—and sometimes only to public works projects over a certain dollar amount. There is also a federal Prompt Payment Act for federal construction projects.

In Indiana, prompt payment statutes are designed to ensure that contractors and subcontractors are paid in a timely manner for their work on construction projects. Indiana Code Title 26, Article 2, Chapter 5, specifically addresses the prompt payment for public works projects. According to these statutes, a contractor must be paid within 35 days after the public agency receives a proper invoice, and subcontractors must be paid within 10 days after the contractor receives payment from the public agency. If payment is not made within these time frames, interest may accrue on the unpaid amount. These laws apply to public works projects that are funded by state or local government entities. For federal construction projects, the Federal Prompt Payment Act applies, which requires federal agencies to pay contractors within 30 days after receiving an invoice, and contractors to pay subcontractors within 7 days after receipt of payment from the government, with interest penalties for late payments.

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Construction law

prompt payment statutes

Individual & Family Legal Plan

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Indiana State Code

Indiana State Code

Construction law

prompt payment statutes

Articles