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California Supreme Court Provides Clarity to California’s Prompt Payment Exception

California Supreme Court Provides Clarity to California’s Prompt Payment Exception

By: Timothy L. Pierce and Heather L. Frisch

The California Supreme Court issued an opinion on 14 May 2018 in United Riggers & Erectors, Inc. v. Coast Iron & Steel Co. that resolves a split in authority regarding whether Civil Code Section 8814 excuses prompt payment of retention by an owner or prime contractor if a good faith dispute of any kind exists between the parties or only when there is a dispute over the work for which the retention is due. The Court held that a contractor is only entitled to withhold retention when there is a dispute arising out of the work on which the retention is based.

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