White Paper

4 Pages
  • 4 Pages

California Supreme Court Clarifies “Good Faith Dispute” Under California’s Prompt Payment Law

 

Recent court case addresses if a direct contractor can withhold payment from a subcontractor based on good faith dispute exception.

The issue in this case was whether or not the good faith withholding exception applies to any argument between the parties or only arguments that are directly related to the particular payment that would otherwise be due. This white paper reviews the court’s decision that an argument must be clearly connected with or related to the specific payment that would otherwise be due.