Or. Rev. Stat. » Oregon Revised Statutes
Oregon Revised Statutes

Or. Rev. Stat. § 701.420 (2026)

Partial payment; retainage; effect; interest; notice of completion; payment by contractor and owner

✓ current as of May 2026
Find cases: SyfertCases citing this section ORSoregonlegislature.gov JustiaChapter on Justia CornellLII Search CasesGoogle Scholar

      701.420 Partial payment; retainage; effect; interest; notice of completion; payment by contractor and owner. (1) Partial payment is allowed and may be made on contracts for construction and home improvement. An owner, contractor or subcontractor may withhold as retainage an amount equal to not more than five percent of the contract price of the work completed. Partial payment allowed under this subsection is not acceptance or approval of some of the work or a waiver of defects in the work.

      (2) The owner, contractor or subcontractor shall pay interest at the rate of one percent per month on the final payment due the contractor or subcontractor. The interest shall commence 30 days after the contractor or subcontractor has completed and the owner has accepted the work under the contract for construction for which the final payment is due. The interest shall run until the date when final payment is tendered to the contractor or subcontractor. When the contractor or subcontractor considers the work that the contractor or subcontractor is contracted to perform to be complete, the contractor or subcontractor shall notify the party to whom the contractor or subcontractor is responsible for performing the construction work under the contract. The party shall, within 15 days after receiving the notice, either accept the work or notify the contractor or subcontractor of work yet to be performed under the contract. If the party does not accept the work or does not notify the contractor or subcontractor of work yet to be performed within the time allowed, the interest required under this subsection shall commence 30 days after the end of the 15-day period.

      (3) When a contractor pays a subcontractor in full, including the amount the contractor withheld as retainage, the owner with whom the contractor has the contract shall pay the contractor, out of the amount that the owner withheld from the contractor as retainage, a sum equal to the amount of retainage that the contractor paid the subcontractor. The contractor shall notify the owner when the contractor pays a subcontractor in full under this section and the owner shall, within 15 days after receiving the notice, pay the contractor the amount due the contractor under this subsection. Interest on the amount due the contractor at the rate of one percent per month shall commence 30 days after the owner receives notice of full payment to the subcontractor. [1975 c.772 §2; 2010 c.77 §8; 2013 c.410 §2; 2019 c.486 §2; 2024 c.2 §3]

 

      Note: See note under 701.410.

Notes of Decisions
Cited in 2 cases, 1990–1998 · leading case: A-C Constr., Inc. v. Bakke Corp., 956 P.2d 219 (Or. Ct. App. 1998).
Sort: Relevance Newest Treatment
A-C Constr., Inc. v. Bakke Corp., 956 P.2d 219 (Or. Ct. App. 1998). · cites it 5× “That statute provides for one percent monthly interest on payments withheld from a contractor or subcontractor under ORS 701.420(1). That subsection, in turn, allows an owner, contractor or subcontractor to withhold up to five percent of the contract price as “retainage.”
P & C Constr. Co. v. Am. Diversified/Wells Park II, 789 P.2d 688 (Or. Ct. App. 1990). · cites it 2× “Defendants contend that there are only two bases on which it could have awarded 12 percent interest: (1) The construction contract between Princeton and plaintiff provided that payments due and unpaid would bear interest at 12 percent from the date payment was due; and (2) ORS…”
— Or. Rev. Stat. § 701.420(1) — 1 case
A-C Constr., Inc. v. Bakke Corp., 956 P.2d 219 (Or. Ct. App. 1998). “That statute provides for one percent monthly interest on payments withheld from a contractor or subcontractor under ORS 701.420(1). That subsection, in turn, allows an owner, contractor or subcontractor to withhold up to five percent of the contract price as “retainage.”
— Or. Rev. Stat. § 701.420(2) — 2 cases
A-C Constr., Inc. v. Bakke Corp., 956 P.2d 219 (Or. Ct. App. 1998). “That statute provides for one percent monthly interest on payments withheld from a contractor or subcontractor under ORS 701.420(1). That subsection, in turn, allows an owner, contractor or subcontractor to withhold up to five percent of the contract price as “retainage.”
P & C Constr. Co. v. Am. Diversified/Wells Park II, 789 P.2d 688 (Or. Ct. App. 1990). “Defendants contend that there are only two bases on which it could have awarded 12 percent interest: (1) The construction contract between Princeton and plaintiff provided that payments due and unpaid would bear interest at 12 percent from the date payment was due; and (2) ORS…”
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.