Civ. Code, § 8724 · Article 3. Form of Security
Civ. Code, § 8724
Text — As published in the Legislative Counsel's database, tables dated October 18, 2026 (pubinfo_2025.zip)
An irrevocable letter of credit under this chapter shall satisfy all of the following requirements:
(a) The letter of credit shall be issued by a financial institution, as defined in Section 5107 of the Financial Code, inuring to the benefit of the direct contractor.
(b) The letter of credit shall be in an amount not less than 15 percent of the contract price for the work of improvement or, if the work of improvement is to be substantially completed within six months after the commencement of work, not less than 25 percent of the contract price.
(c) The maturity date and other terms of the letter of credit shall be determined by agreement between the owner, the direct contractor, and the financial institution, except that the owner shall maintain the letter of credit in effect until the owner has satisfied its payment obligation to the direct contractor.
Notes and commentary — not statutory text
History
Added by Stats. 2010, Ch. 697, Sec. 20. (SB 189) Effective January 1, 2011. Operative July 1, 2012, by Sec. 105 of Ch. 697 and by Section 8052.
Source of truth
- Edition
- As published in the Legislative Counsel's database, tables dated October 18, 2026 (pubinfo_2025.zip)
- Official file
- https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=8724.
- Text hash
- sha256 9179091b9f2b4d402810f928ad84b26ab6c9b4c8353cc6a49cf5daa8935e7d3a
- Composed by
- compose_ca.py 2026-10-22: the Legislative Counsel's CAML content files read by a tokenizer (caml_readers.reader_a); an independent xml.etree reading (caml_readers.reader_b) agrees on every section
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Civil Code
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