I am indebted to the Society of Construction Law and the paper published this month on payments in construction contracts-how to get paid by Barry Hembling for prodding me into issuing this short note. The paper lists the issues the Courts have considered when disputes about what sums are due comes before them.
Only a few of the lessons to be drawn can be set out in this note , but here are some key ones :
- Check the payment terms in your contracts reflect what you agreed, allowing for the requirement for construction contracts ( where applicable as not all activities are caught) to include the payment notice and pay less notice required by statute. Look up Sections 104 and 106 of Part II of the Housing Grants, Construction and Regeneration Act 1996 if in doubt if your contract is caught and anyway check its terms as the standard construction terms are designed to comply.
- Beware if the activity is caught and the contract terms agreed are not consistent with the 1996 Act ( they could be one-off terms) the statutory Scheme for Construction Contracts and through that way the Act will apply.
- Follow the terms of the contract, or safer still the 1996 Act, in preparing and issuing notices to support your position.
- If the paying party challenge applications for payments in time, and in any event look at the worth of the work done and consider if the amount claimed needs reassessing.
- Check your paperwork is presented in the right way, has the correct titles and descriptions in it, and does do what it claims to do.
- Avoid qualifying applications and responses if you can, it is far better to set out what you are doing clearly if you know you might want to rely on it in the future.
Disputes will arise, adjudications occur, but at least by taking the simple steps mentioned above you can do your best to protect yourself.