This chapter does not prevent the prime contractor from reasonably withholding payment or a portion of payment to the remote contractor, as long as the withheld payment is in accordance with the written contract between the prime contractor and the remote contractor. The prime contractor may also withhold a reasonable amount of retainage as specified in the written contract between the prime contractor and remote contractor; except, that the retainage amount must not exceed five percent (5%) of the amount of the contract.
Tenn. Code Ann. § 66-34-303
Withholding of payment or retainage by prime contractor
Known as the Prompt Pay Act
The act spans §§ 66-34-101 to 66-34-704 (22 sections).
Acts 1991, ch. 45, § 1; 2007, ch. 201, § 6; 2020, ch. 749, § 25.
Current official text: Tennessee Code (LexisNexis). Digitized from the UniCourt Code Improvement Commission public-domain capture. Reproduced from public-domain Tennessee statutes; confirm against the official source for the current text. Not legal advice.