R&N’s Construction Team – building another good year
Peter adds “One of the main aims of the Construction Act 1996 (as amended with effect from 2011; “the 2006 Act”) was to stop employers from disputing each and every payment application from contractors without good reason. As a result, if it wishes to dispute a particular payment request, the employer must serve a Pay Less Notice in good time. If the construction contract in question does not provide for a suitable Pay Less Notice regime, then one will be implied as a matter of law. According to section 111(4) of the 2006 Act, a valid Pay Less Notice must specify: (a) the sum that the paying party considers due; and (b) the basis on which that sum is calculated. The sum may be zero, but that sum must actually be stated and the basis for its calculation must also be set out. If the employer does not serve a valid Pay Less Notice in time, the contractor will be entitled to be paid the claimed amount, whatever the dispute may be (i.e. whether the contractor has properly performed the contract or not). Parties must abide by the contract terms, the 2006 Act and the Scheme for Construction Contracts (where applicable)”.
For more information and details contact Peter Hastings on 01603 675639 or email peter.hastings@rogers-norton.co.uk