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The Texas Prompt Payment Act is an important legal protection for contractors and subcontractors in Texas. By setting strict payment deadlines and penalties for noncompliance, the law provides a level of security for those who work in the construction industry.

Every subcontractor is entitled to receive payments on time. If any wage is unpaid, the professional has the right to file a lien against the property owner. Other terms include a supplier's lien if materials are supplied, a laborer's lien and a design professional's lien.

(20) Subcontractor--An entity that contracts with a prime contractor to work or contribute toward completing work under a purchase order or other contract. The term does not include employees of the contractor but includes contracted workers who will work on the contract.

Chapter 2251 of the Texas Government Code outlines the requirements for payment in the state. That law requires that payments be made within 30 days of their due date. One of the most important provisions of the law is that when an insurance company is late with its payment, it must pay interest charges.

On private projects in Texas, the property owner must make payment to the prime contractor within 35 days of invoice receipt. Once the prime contractor receives payment from the property owner, they must pay their subs and suppliers within 7 days.

A: Your subcontract agreement should include details such as the names and addresses of both parties involved; an outline of the services or tasks being undertaken; payment terms; timelines for completion of work; any additional clauses related to intellectual property rights; confidentiality obligations; protection ...