Monday, June 1, 2015

Accrual of Prompt-Payment Act Interest During Disputes Over Latent Defects

Claramargaret H. Groover has asked for our thoughts and experience regarding the following issue arising under a construction contract:

An owner that has not yet paid a contractor discovers a latent defect with the contractor's work. The contractor has not remedied the defect. Would a Prompt-Payment Act impose statutory interest on the owner if it withholds the funds needed to remedy the defect?

Analyses under any jurisdiction's law are welcome, particularly with any statutory or judicial authority in support.

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