{"data":{"id":"us-ky/krs-371.405","jurisdiction":"us-ky","citation":"KRS 371.405","heading":"Conditions governing enforceability of construction contracts -- Payment","body":"of amounts due.\n(1) All payments on construction contracts entered into after June 26, 2007, shall be\nmade pursuant to the terms of the contract and as required in this section and KRS\n371.410.\n(2) The following provisions in a contract for construction shall be against the public\npolicy of this Commonwealth and shall be void and unenforceable:\n(a) A provision that purports to waive, release, or extinguish the right to re solve\ndisputes through litigation in court or substantive or procedural rights in\nconnection with such litigation, except that a contract may require binding\narbitration as a substitute for litigation or require nonbinding alternative\ndispute resolution as a prerequisite to litigation;\n(b) A provision that purports to waive, release, or extinguish rights provided by\nKRS Chapter 376, with the exception of partial waivers of lien rights provided\nby the contractor or subcontractor for progress payments;\n(c) A provision that purports to waive, release, or extinguish any of the\nrequirements of KRS 371.160; or\n(d) A provision that purports to waive, release, or extinguish the right of a\ncontractor or subcontractor to recover costs, additional time, or damages, or\nobtain an equitable adjustment of the contract, for delays in performing the\ncontract that are, in whole or part, within the control of the contracting entity.\nUnusually bad weather that cannot be reasonably anticipated, fire, or other act\nof God shall not  automatically entitle the contractor to additional\ncompensation under this paragraph.\n(3) Subsection (2)(d) of this section shall not render null, void, and unenforceable a\ncontract provision that:\n(a) Permits a contractor or subcontractor to recover that  portion of delay costs\ncaused by acts or omissions of the contracting entity;\n(b) Requires notice of any delay by the party affected by the delay;\n(c) Provides for reasonable liquidated damages;\n(d) Provides for arbitration or any other procedure designed to resolve contract\ndisputes; or\n(e) Specifies which costs are recoverable by a contractor or subcontractor for\ndelay.\n(4) If a provision of a construction contract is found to be null and unenforcea ble, that\nprovision shall not affect other provisions of the contract that are in compliance\nwith this section and, to this end, the provisions of the contract are severable.\n(5) Except as provided in subsection (7) of this section, all contracts for const ruction\nshall provide that payment of amounts due a contractor from a contracting entity,\nexcept retainage, shall be made within thirty (30) business days after the contracting\nentity receives a timely, properly completed, undisputed request for payment.\n(6) Except as provided in subsection (7) of this section, if the contracting entity fails to\npay a contractor within thirty (30) business days following receipt of a timely,\nproperly completed, undisputed request for payment, the contracting entity shall\npay interest to the contractor beginning on the thirty -first business day after receipt\nof the request for payment, computed at the rate of twelve percent (12%) per annum\non the unpaid amount. Twenty -five (25) business days following the submission of\na timely, properly completed, undisputed request for payment, the contractor shall\nnotify the contracting entity by certified mail if payment has not been received. The\nnotice shall also include the date on which interest shall begin to accrue.\n(7) For purposes of subsections (5) and (6) of this section, a postsecondary institution\nand a board of education shall have forty -five (45) business days to make the\npayment required by those subsections. For purposes of payments by a board of\neducation, the Department of Education shall have ten (10) business days, including\nthe day the undisputed request for payment is received, to complete the final\napproval and application for payment and return it to the board of education. The\nten (10) business days shall be included  in the forty -five (45) business days. If the\ncontracting entity fails to pay a contractor within forty -five (45) business days after\nreceipt of the timely, properly completed, undisputed request for payment, the\ncontracting entity shall, beginning on the forty-sixth day after receipt of the request,\npay interest to the contractor computed at the rate of twelve percent (12%) per\nannum on the unpaid amount.\n(8) A contractor shall pay its subcontractors any undisputed amounts due within fifteen\n(15) business days of receipt of payment from the contracting entity, including\npayment of retainage if retainage is released by the contracting entity, if the\nsubcontractor has provided a timely, properly completed, and undisputed request\nfor payment to the contractor.\n(9) If a contractor fails to pay a subcontractor any undisputed amounts due within\nfifteen (15) business days of receipt of payment from the contracting entity, the\ncontractor shall pay interest to the subcontractor beginning on the sixteenth\nbusiness day  after receipt of payment by the contractor, computed at the rate of\ntwelve percent (12%) per annum on the unpaid amount.\n(10) Subsections (8) and (9) of this section shall apply to all payments from\nsubcontractors to their subcontractors.","path":["KRS Chapter 371"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=56548","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:08Z","sha256":"22cff66e01f31f4a78e846d33a71b2ac468df7ff0c30d7de10aaa1a9f4997c6d","source_id":"us-ky","stale":false,"prev":"us-ky/krs-371.400","next":"us-ky/krs-371.410"},"notice":"GroundRules: Original legal text. Not legal advice."}