The Vermont Statutes Online
The Statutes below include the actions of the 2025 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
(Cite as: 9 V.S.A. § 4007)
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§ 4007. Disputes; penalties; attorney’s fees
(a) Nothing in this chapter shall prevent an owner, contractor, or subcontractor from
withholding payment in whole or in part under a construction contract in an amount
equalling the value of any good faith claims against an invoicing contractor or subcontractor,
including claims arising from unsatisfactory job progress, defective construction,
disputed work, or third-party claims.
(b) If arbitration or litigation is commenced to recover payment due under the terms of
this chapter and it is determined that an owner, contractor, or subcontractor has
failed to comply with the payment terms of this chapter, the arbitrator or court shall
award, in addition to all other damages due and as a penalty, an amount equal to one
percent per month of all sums as to which payment has wrongfully been withheld. An
amount shall not be deemed to have been wrongfully withheld to the extent it bears
a reasonable relation to the value of any claim held in good faith by the owner, contractor,
or subcontractor against which an invoicing contractor, or subcontractor is seeking
to recover payment.
(c) Notwithstanding any contrary agreement, the substantially prevailing party in any
proceeding to recover any payment within the scope of this chapter shall be awarded
reasonable attorney’s fees in an amount to be determined by the court or arbitrator,
together with expenses. (Added 1991, No. 74, § 1, eff. Jan. 1, 1992.)