A divided Massachusetts Supreme Judicial Court issued an opinion of first impression on the state’s Prompt Pay Act Monday, with the majority determining that the legislation can prevent a general contractor from bringing an affirmative defense against a subcontractor’s breach of contact claim if the general contactor failed to pay the subcontractor’s invoices.
The majority held that the legislation does not cause a party to waive its defense due to failure to approve or reject invoices within the strict time requirements the act established. Instead, the party that neither approves nor rejects a payment application within the requisite time must first make the payment to pursue any defenses in a subsequent proceeding.
