For the last 13 years, Part II of the Housing Grants, Construction and Regeneration Act 1996 (the Construction Act), together with the Scheme for Construction Contracts 1998 (England and Wales) Regulations 1998 (the Scheme), has regulated the conditions of construction contracts.
The Construction Act and the Scheme introduced statutory adjudication as an interim method of resolving disputes, subject to final determination by arbitration or the courts. The Construction Act and the Scheme also regulated the payment terms in construction contracts by providing for stage payments, payment notices and withholding notices, due dates and final dates for payment and the suspension of performance by the contractor or subcontractor for non-payment by the employer or contractor.
On the 1 October 2011 the Construction Act will be amended by Part 8 of the Local Democracy, Economic Development and Construction Act 2009.
The changes will affect adjudication, payment, suspension and will also abolish “pay when certified” clauses. There is a need to ensure that any construction contract which is entered into on or after 1 October 2011 is updated otherwise the terms will not be complaint with the updated Construction Act and the terms if the Scheme will apply to your contract instead.
For more information on what impact the changes could have for you, why not sign up for one of our construction law seminars on the changes to the Construction Act.