Prompt Pay Flashcards
What is the Prompt Pay requirement for all purchased by LG?
Will pay in a timely manner.
State the 3 stated purposes of the Prompt Payment Act.
PROMPT PAY
1) Require LG to prompt pay construction services.
2) Apply interest to construction late payments.
3) Provide dispute resolution.
What is first thing LG must designate when entering a K w/ a contractor?
LG rep to receive contractor invoices.
What does contractor invoice due date depend on?
Whether LG rep must approve the invoice prior to presentation to LG for payment.
What is due date of contractor invoice if LG rep must first approve?
25 business days from date invoice is stamped received.
What is due date of contractor invoice if LG rep need not first approve?
20 days from date invoice stamped received.
Lay out due dates, interest rate & when interest begins:
For Const. (pre-approved v. need-approval)
For Non-Const.
PROMPT PAY ----------- CONSTRUCTION: Pre-approval is 25 BUSINESS days. Non-approval is 20 BUSINESS days. 2% int., from due date ----------- NON-CONSTRUCTION: 45 days (non-business ~confirmed). 1% int., 30 days aft due date
If LG misses a payment deadline, what must contractor do?
Send overdue notice.
What is significance of LG’s receipt of overdue notice?
After 4 business days of delivering an overdue notice, if LG does not reject the invoice it is deemed undisputed.
What is LG required to do if it disputes the invoice or the overdue notice?
w/i 20 days of receipt, provide written rejection, specifying deficiency & stating action to rectify.
If LG sent ktor a written rejection of an invoice & ktor revises the invoice, what now must LG do?
PROMPT PAY ----------- r-e-v-i-s-e-d p-a-y ----------- Pay or notice rejection: a) w/i 10 business days of receipt or b) 1st business day after LG's next mtg.
How long does a contractor have to pay its subs after receiving LG payment?
10 days.
How long does subcontractor have to pay the sub-subcontractors after receiving contractor’s payment?
7 days.
What are penalties for LG late payment for construction services?
2% per month (more if agreed to in K). ***NEW 2021*** used to be 1%, ----------- CONSTR: 2% upon: 20 bus days - no app. 25 bus days - app ------------ NON-CONST 1% upon: 45 cal days + 30 days ------------ 4 days for owed notice 10 days to pay or 1st bd mtg.
Are costs & attorneys fees available to a contractor?
PROMPT PAY ----------- Yes + Yes for disputes w/ subs. ----------- ~confirmed 218.76 (3) In an action to recover amounts due under this part, the court shall award court costs and reasonable attorney’s fees, including fees incurred through appeal, to the prevailing party.
