Vermont Statutes Annotated
Vt. Stat. Ann. tit. 09, § 4002 (2026)
Owner’s payment obligations
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(Cite as: 9 V.S.A. § 4002)
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§ 4002. Owner’s payment obligations
(a) The owner shall pay the contractor strictly in accordance with the terms of the construction contract.
(b) In the event that the construction contract does not contain a term governing the terms of payment, the contractor shall be entitled to invoice the owner for progress payments at the end of the billing period. The contractor shall be entitled to submit a final invoice for payment in full upon completion of the agreed-upon work.
(c) Except as otherwise agreed, payment of interim and final invoices shall be due from the owner 20 days after end of billing period or 20 days after delivery of invoice, whichever is later.
(d) Except as otherwise agreed, if any progress or final payment to a contractor is delayed beyond the due date established in subsection (c) of this section, the owner shall pay the contractor interest, beginning on the 21st day, at an interest rate equal to that established by 12 V.S.A. § 2903(b), on such unpaid balance as may be due. (Added 1991, No. 74, § 1, eff. Jan. 1, 1992.)
Notes of Decisions
Cited in 15
cases (6 in the last 5 years), 2002–2026 · leading case: Fletcher Hill, Inc. v. Crosbie, 2005 VT 1, 872 A.2d 292.
Fletcher Hill, Inc. v. Crosbie, 2005 VT 1, 872 A.2d 292. “For example, pursuant to 9 V.S.A. § 4002(d), payments to the contractor delayed beyond the due date will accrue interest, beginning on the twenty-first day, at a rate equal to that established by 12 V.”
Donald L. Sweet v. Roy A. St. Pierre, 2018 VT 122, 201 A.3d 978. “See 9 V.S.A. § 4002(a) ("The owner shall pay the contractor strictly in accordance with the terms of the construction contract.”
Birchwood Land Co. v. Ormond Bushey & Sons, Inc., 2013 VT 60, 82 A.3d 539. “Further, if the owner unreasonably withholds acceptance of work and fails to pay, the owner i is subject to payment of interest, a penalty, and attorney’s fees. Id. § 4005(d).”
Elec. Man, Inc. v. Charos, 2006 VT 16, 895 A.2d 193. “9 V.S.A. § 4002(b), (c). Contractor claimed that his lawyer’s letter of January 2002 was an invoice under the statute, and it sought a progress payment covering both labor and materials.”
Reed v. Zurn, 2010 VT 14, 992 A.2d 1061. “Defendants rely upon 9 V.S.A. § 4002(b), which states that unless otherwise provided in the construction contract, “the contractor shall be entitled to invoice the owner for progress payments at the end of the billing period.”
J.A. McDonald, Inc. v. Waste Sys. Int'l Moretown Landfill, Inc., 247 F. Supp. 2d 542 (D. Vt. 2002). “Moreover, in this case McDonald demanded prejudgment interest pursuant to the penalty provisions of the Vermont Prompt Payment Act, Vt. Stat. Ann tit. 9, §§ 4002(d), 4007(b).”
Lacillade's v. Dreslin, No. 25-cv-1310 (Vt. Super. Ct. Aug. 14, 2025). “Thus, whereas Lacillade’s, as the contractor, may be entitled to a 1% per month statutory penalty for Dreslin’s failure to comply with the payment terms of the PPA, id.”
Allen v. Feeney Prop., No. 24-cv-846 (Vt. Super. Ct. July 25, 2024). “In construction cases, homeowners are typically obligated by the Vermont Prompt Payment Act to pay their contractor “strictly in accordance with the terms of the construction contract,” and to pay periodic invoices that are submitted along the way.”
Facility Gateway Corp. v. Sovernet, Inc., No. 273-3-17 Cncv (Vt. Super. Ct. Oct. 31, 2017). “However, an owner may withhold payment from a contractor “in an amount equaling 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…”
Troy Boiler Works, Inc. v. Long Falls Paperboard, LLC, No. 2:21-cv-00030 (D. Vt. June 16, 2022). “” 9 V.S.A. § 4002(a); see Birchwood Land Co.”
Kerr v. Clark, No. 24-cv-3940 (Vt. Super. Ct. Apr. 8, 2026). “See 9 V.S.A. §§ 4002, 4003. The Legislature enacted the Act to ensure "the Prompt Payment of Construction Invoices.”
Turk v. Ecowood Floors, No. 25-cv-5517 (Vt. Super. Ct. Apr. 16, 2026). “” 9 V.S.A. § 4002(c). The Vermont Supreme Court, however, has rejected the premise that the Prompt Pay Act conditions its application upon the submission of particular invoices.”
Vt. Stat. Ann. tit. 09, § 4002(a): 7 cases
Donald L. Sweet v. Roy A. St. Pierre, 2018 VT 122, 201 A.3d 978. “See 9 V.S.A. § 4002(a) ("The owner shall pay the contractor strictly in accordance with the terms of the construction contract.”
Birchwood Land Co. v. Ormond Bushey & Sons, Inc., 2013 VT 60, 82 A.3d 539. “Further, if the owner unreasonably withholds acceptance of work and fails to pay, the owner i is subject to payment of interest, a penalty, and attorney’s fees. Id. § 4005(d).”
Allen v. Feeney Prop., No. 24-cv-846 (Vt. Super. Ct. July 25, 2024). “In construction cases, homeowners are typically obligated by the Vermont Prompt Payment Act to pay their contractor “strictly in accordance with the terms of the construction contract,” and to pay periodic invoices that are submitted along the way.”
Facility Gateway Corp. v. Sovernet, Inc., No. 273-3-17 Cncv (Vt. Super. Ct. Oct. 31, 2017). “However, an owner may withhold payment from a contractor “in an amount equaling 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…”
Troy Boiler Works, Inc. v. Long Falls Paperboard, LLC, No. 2:21-cv-00030 (D. Vt. June 16, 2022). “” 9 V.S.A. § 4002(a); see Birchwood Land Co.”
Vt. Stat. Ann. tit. 09, § 4002(b): 3 cases
Donald L. Sweet v. Roy A. St. Pierre, 2018 VT 122, 201 A.3d 978. “See 9 V.S.A. § 4002(a) ("The owner shall pay the contractor strictly in accordance with the terms of the construction contract.”
Elec. Man, Inc. v. Charos, 2006 VT 16, 895 A.2d 193. “9 V.S.A. § 4002(b), (c). Contractor claimed that his lawyer’s letter of January 2002 was an invoice under the statute, and it sought a progress payment covering both labor and materials.”
Reed v. Zurn, 2010 VT 14, 992 A.2d 1061. “Defendants rely upon 9 V.S.A. § 4002(b), which states that unless otherwise provided in the construction contract, “the contractor shall be entitled to invoice the owner for progress payments at the end of the billing period.”
Vt. Stat. Ann. tit. 09, § 4002(c): 2 cases
Turk v. Ecowood Floors, No. 25-cv-5517 (Vt. Super. Ct. Apr. 16, 2026). “” 9 V.S.A. § 4002(c). The Vermont Supreme Court, however, has rejected the premise that the Prompt Pay Act conditions its application upon the submission of particular invoices.”
Turk v. Ecowood Floors, No. 25-cv-5517 (Vt. Super. Ct. June 24, 2026).
Vt. Stat. Ann. tit. 09, § 4002(d): 4 cases
Fletcher Hill, Inc. v. Crosbie, 2005 VT 1, 872 A.2d 292. “For example, pursuant to 9 V.S.A. § 4002(d), payments to the contractor delayed beyond the due date will accrue interest, beginning on the twenty-first day, at a rate equal to that established by 12 V.”
Birchwood Land Co. v. Ormond Bushey & Sons, Inc., 2013 VT 60, 82 A.3d 539. “Further, if the owner unreasonably withholds acceptance of work and fails to pay, the owner i is subject to payment of interest, a penalty, and attorney’s fees. Id. § 4005(d).”
J.A. McDonald, Inc. v. Waste Sys. Int'l Moretown Landfill, Inc., 247 F. Supp. 2d 542 (D. Vt. 2002). “Moreover, in this case McDonald demanded prejudgment interest pursuant to the penalty provisions of the Vermont Prompt Payment Act, Vt. Stat. Ann tit. 9, §§ 4002(d), 4007(b).”
Lacillade's v. Dreslin, No. 25-cv-1310 (Vt. Super. Ct. Aug. 14, 2025). “Thus, whereas Lacillade’s, as the contractor, may be entitled to a 1% per month statutory penalty for Dreslin’s failure to comply with the payment terms of the PPA, id.”
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