Earthshaking Decision in California
May 8, 2020
California public works subcontractors may now recover all amounts earned from a payment bond before the general contractor is fully paid by from the owner of the project.
The Court of Appeal affirmed the trial court’s determination that enforcing the “pay-when-paid” clause would run afoul of Civil Code 8122 and would impermissibly “affect or impair” the subcontractor’s bond claim rights by postponing the right to recover under the payment bond for an indefinite time period.
This comes after a contractor was working on a public works project and a dispute between the contractor and the project came about. Most of the work on the project had already been completed, but the contractor had not been paid due to the dispute.
For a more in depth explanation view the full article here.