Construction & Public Contracts Group, Hinckley Allen, LLP
Christopher Morog Partner
Robert T. Ferguson Partner
The Massachusetts Supreme Judicial Court Issues Anticipated Decision Concerning the Massachusetts Prompt Payment Act For the first 12 years since it was enacted in 2010, no Massachusetts appellatelevel court had issued a decision concerning the Massachusetts Prompt Payment Act. After a dozen years, we have now had three appellate-level decisions addressing this statute in the past four years, including most recently, a June 2026 decision of the Massachusetts Supreme Judicial Court (“SJC”).
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or those who may be unfamiliar, the Massachusetts Prompt Payment Act generally applies to certain private construction projects in excess of $3 Million (but not projects containing 1-4 dwelling units). The statute sets forth specific timeframes and requirements applicable to the review, approval, and rejection of applications for payment and change order requests. To comply with the statute, a rejection must not only be timely, it must be made in writing, set forth the factual and contractual bases for the rejection, and include a certification that the rejection has been made in good faith. Otherwise, the application for payment or the change order request is deemed to be approved under the terms of the statute. In 2022, the Massachusetts Appeals Court issued a written decision confirming that the statute means what it says: when there has been a failure to comply with the statutory requirements, an application for payment (or change order request for that matter) is deemed to be approved and is therefore due and payable (the “Tocci” case). The SJC weighed in two years later, in 2024 (the “Graycor” case). The SJC’s decision in Graycor addressed an important question under the statute, namely: whether a general contractor waives its right to assert common-law defenses to payment if the
AUGUST, 2026
general contractor fails to comply with the statutory requirements for rejecting a subcontractor’s applications for payment. The SJC in Graycor concluded that, under the Prompt Pay Act, a party does not automatically waive all common-law defenses by failing to approve or reject an application for payment as required by the statute. However, the SJC determined that in order to preserve its common-law defenses, a contractor that fails to approve or reject a subcontractor’s application for payment in accordance with the statute must: (1) make payment of the “deemed approved” invoice to the subcontractor; and (2) raise its defenses prior to or contemporaneously with the continued on page 31
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