Last edited 04 Mar 2015

Payment notice for construction contracts

The Housing Grants, Construction and Regeneration Act 1996 (also known as the Construction Act) include provisions to ensure that payments are made promptly throughout the supply chain.

These provisions include:

  • The right to be paid in interim, periodic or stage payments.
  • The right to suspend (or part suspend) performance for non-payment and to claim costs and expenses incurred and extension of time resulting from the suspension.
  • Pay when certified clauses are not allowed, and the release of retention cannot be prevented by conditions within another contract.

In addition, there are specific provisions in relation to the procedures for making payments.

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Good information and helpful.

Quick question I have relating to a subcontractor's payment application received. I made an assessment and issued to the subcontractor in error. This was then later revised and payment was made on the revised assessment. How does this stand in terms of final account?



My gut feeling is that you are entitled to revise an assessment up or down at any time prior to agreeing a final account providing you can support the revision with tangible evidence such as a mathematical or quantification error. Any element of subjective judgment however is more tricky, as a downward adjustment might be interpreted as a negotiating tactic or client pressure.

Clearly the precise answer will depend on the terms of the relevant sub-contract and any terms attached to the valuation...written or oral. But as a general rule interim valuations are just that and can be revised up or down before the final certificate or any binding agreement on any final account. Also it is a general principle of law that mistakes of fact can be amended or may not even be binding as the law recognizes a defence of mistake of fact though not mistake of law and provided no estoppel has arisen.