Illinois General Assembly - Full Text of Public Act 095-0567
Illinois General Assembly

Previous General Assemblies

Public Act 095-0567




Public Act 095-0567
HB0743 Enrolled LRB095 06522 LCT 26624 b

    AN ACT concerning construction contracts.
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
    Section 1. Short title. This Act may be cited as the
Contractor Prompt Payment Act.
    Section 5. Definitions. In this Act:
    (a) "Payment application" means, in accordance with the
terms and definitions of the applicable contract, any invoice,
bill or other request for periodic payment, final payment,
payment of change order or request for release of retainage
from the contractor to the owner.
    (b) "Construction contract" means a contract or
subcontract, entered into after the effective date of this Act,
for the design, construction, alteration, improvement, or
repair of Illinois real property, except for contracts that
require the expenditure of public funds and contracts for the
design, construction, alteration, improvement, or repair of
single family residences or multiple family residences with 12
or fewer units in a single building.
    (c) "Contractor" and "subcontractor" shall have the
meanings ascribed to them by the Illinois Mechanics Lien Act
and cases decided under that Act.
    Section 10. Construction contracts. All construction
contracts shall be deemed to provide the following:
    (1) If a contractor has performed in accordance with the
provisions of a construction contract and the payment
application has been approved by the owner or the owner's
agent, the owner shall pay the amount due to the contractor
pursuant to the payment application not more than 15 calendar
days after the approval. The payment application shall be
deemed approved 25 days after the owner receives it unless the
owner provides, before the end of the 25-day period, a written
statement of the amount withheld and the reason for withholding
payment. If the owner finds that a portion of the work not in
accordance with the contract, payment may be withheld for the
reasonable value of that portion only. Payment shall be made
for any portion of the contract for which the work has been
performed in accordance with the provisions of the contract.
Instructions or notification from an owner to his or her lender
or architect to process or pay a payment application does not
constitute approval of the payment application under this Act.
    (2) If a subcontractor has performed in accordance with the
provisions of his or her contract with the contractor or
subcontractor and the work has been accepted by the owner, the
owner's agent, or the contractor, the contractor shall pay to
his or her subcontractor and the subcontractor shall pay to his
or her subcontractor, within 15 calendar days of the
contractor's receipt from the owner or the subcontractor's
receipt from the contractor of each periodic payment, final
payment, or receipt of retainage monies, the full amount
received for the work of the subcontractor based on the work
completed or the services rendered under the construction
    Section 15. Interest; suspension of performance.
    (a) If a payment due pursuant to the provisions of this Act
is not made in a timely manner, the delinquent party shall be
liable for the amount of that payment, plus interest at a rate
equal to 10% per annum.
    (b) A contractor or subcontractor who is not paid as
required by this Act may, after providing 7 calendar days'
written notice to the party failing to make the required
payment, suspend performance of a construction contract
without penalty for breach of contract, until the payment
required pursuant to this Act is made.
    (c) The interest imposed by this Act shall not be
duplicative of the interest charged under the Mechanics Lien
    Section 99. Effective date. This Act shall take effect upon
becoming law.

Effective Date: 8/31/2007