SECTIONS 8800-8802 - California Statutes

CIVIL CODE

SECTION 8800-8802

8800. (a) Except as otherwise agreed in writing by the owner and
direct contractor, the owner shall pay the direct contractor, within
30 days after notice demanding payment pursuant to the contract is
given, any progress payment due as to which there is no good faith
dispute between them. The notice given shall comply with the
requirements of Chapter 2 (commencing with Section 8100) of Title 1.
(b) If there is a good faith dispute between the owner and direct
contractor as to a progress payment due, the owner may withhold from
the progress payment an amount not in excess of 150 percent of the
disputed amount.
(c) An owner that violates this section is liable to the direct
contractor for a penalty of 2 percent per month on the amount
wrongfully withheld, in place of any interest otherwise due. In an
action for collection of the amount wrongfully withheld, the
prevailing party is entitled to costs and a reasonable attorney's
fee.
(d) This section does not supersede any requirement of Article 2
(commencing with Section 8810) relating to the withholding of a
retention.

8802. (a) This section applies to a contract between a public
utility and a direct contractor for all or part of a work of
improvement.
(b) Unless the direct contractor and a subcontractor otherwise
agree in writing, within 21 days after receipt of a progress payment
from the public utility the direct contractor shall pay the
subcontractor the amount allowed the direct contractor on account of
the work performed by the subcontractor to the extent of the
subcontractor's interest in the work. If there is a good faith
dispute over all or part of the amount due on a progress payment from
the direct contractor to a subcontractor, the direct contractor may
withhold an amount not in excess of 150 percent of the disputed
amount.
(c) A direct contractor that violates this section is liable to
the subcontractor for a penalty of 2 percent of the disputed amount
due per month for every month that payment is not made. In an action
for collection of the amount wrongfully withheld, the prevailing
party is entitled to costs and a reasonable attorney's fee.
(d) This section does not limit or impair a contractual,
administrative, or judicial remedy otherwise available to a
contractor or subcontractor in a dispute involving late payment or
nonpayment by the contractor or deficient performance or
nonperformance by the subcontractor.