Set off in construction contracts - Revision history

Designing Buildings at 09:36, 7 September 2020

2020-09-07T09:36:19Z

← Older revision		Revision as of 09:36, 7 September 2020
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	* Construction Week: [http://www.constructionweekonline.com/article-8040-all-about-the-set-off/ All about the set-off].		* Construction Week: [http://www.constructionweekonline.com/article-8040-all-about-the-set-off/ All about the set-off].

−	[[Category:~~Other_legislation~~]] [[Category:DCN_Legislation]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]]	+	[[Category:DCN_Case_Law]] [[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Legislation]] [[Category:Other_legislation]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Designing Buildings at 13:40, 4 February 2020

2020-02-04T13:40:15Z

← Older revision		Revision as of 13:40, 4 February 2020
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	See also Section 111 (4) Housing Grants, Construction and Regeneration Act.		See also Section 111 (4) Housing Grants, Construction and Regeneration Act.

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Abatement.		* Abatement.
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	* Scheme for Construction Contracts.		* Scheme for Construction Contracts.

−	=== External references ===	+	= External references =

	* [http://www.legislation.gov.uk/ukpga/1996/53/contents Housing Grants, Construction and Regeneration Act].		* [http://www.legislation.gov.uk/ukpga/1996/53/contents Housing Grants, Construction and Regeneration Act].
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	* Construction Week: [http://www.constructionweekonline.com/article-8040-all-about-the-set-off/ All about the set-off].		* Construction Week: [http://www.constructionweekonline.com/article-8040-all-about-the-set-off/ All about the set-off].

−	[[Category:Other_legislation]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]]	+	[[Category:Other_legislation]] [[Category:DCN_Legislation]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Editor at 13:29, 4 September 2018

2018-09-04T13:29:37Z

← Older revision		Revision as of 13:29, 4 September 2018
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	* Adjudication.		* Adjudication.
	* Alternative dispute resolution.		* Alternative dispute resolution.
−	* ~~Contracts~~.	+	* Contract.
	* Contract conditions.		* Contract conditions.
	* Counterclaim.		* Counterclaim.

Editor at 13:29, 4 September 2018

2018-09-04T13:29:07Z

← Older revision		Revision as of 13:29, 4 September 2018
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−	Set off (sometimes called contra charging) is a legal process by which party A defends a claim brought by party B, by A setting off in extinction or diminution of B’s claim, claims which A alleges against B. n	+	Set off (sometimes called contra charging) is a legal process by which party A defends a claim brought by party B, by A setting off in extinction or diminution of B’s claim, claims which A alleges against B.

	For example:		For example:
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	Set off rights can either be contractual, equitable or in the case of insolvency, statutory.		Set off rights can either be contractual, equitable or in the case of insolvency, statutory.

−	Contractual set off will depend on the wording of the agreement between the parties. It is possible for contractual set off rights to extend to a wide range of different contracts, but the wording must be clear. Equitable set off arises by operation of law if there is sufficient proximity and connection between the parties (eg. the same parties, site and project). A recent statement of the law of equitable set off is given in the Court of Appeal judgement in Geldof Metaalconstructie NV v Simon Carves Ltd ~~11th June~~ 2010.	+	Contractual set off will depend on the wording of the agreement between the parties. It is possible for contractual set off rights to extend to a wide range of different contracts, but the wording must be clear. Equitable set off arises by operation of law if there is sufficient proximity and connection between the parties (e.g. the same parties, site and project). A recent statement of the law of equitable set off is given in the Court of Appeal judgement in Geldof Metaalconstructie NV v Simon Carves Ltd [2010].

−	If a contracting party becomes insolvent, the Insolvency Act 1986 Section 323 (bankruptcy) and the Insolvency Rules Rule 4.90 (liquidation) provide for a statutory set off known as ‘mutual credits and mutual debits’. This statutory set off requires account to be taken between the insolvent party and the proving creditor of mutual debts, mutual credits and mutual dealings arising before the insolvency which are then set off leaving only the balance, if any, provable in the insolvency. This is of course only fair as otherwise the creditor would be 100% liable on debts due to the insolvent and only receive the relevant distribution (often nothing) on debts owed by the insolvent.	+	If a contracting party becomes insolvent, the Insolvency Act 1986 Section 323 (bankruptcy) and the Insolvency Rules Rule 4.90 (liquidation) provide for a statutory set off known as ‘mutual credits and mutual debits’.

−	~~In construction contracts, rights of~~ set off and ~~withholding payments are regulated by~~ the ~~Housing Grants~~, ~~Construction~~ and ~~Regeneration Act 1996 Part II Section 111~~, ~~amended~~, ~~with effect from October 2011, by~~ the ~~[http://www~~.~~legislation.gov.uk/ukpga/2009/20/contents Local Democracy~~, ~~Economic Development and Construction Act 2009] Part 8 Section 144. These Acts regulate~~ the ~~contents and prescribed periods for 'pay less' notices which must~~ be ~~served if a party wishes to deduct sums from amounts otherwise~~ due ~~under~~ the ~~contract~~.	+	This statutory set off requires account to be taken between the insolvent party and the proving creditor of mutual debts, mutual credits and mutual dealings arising before the insolvency which are then set off leaving only the balance, if any, provable in the insolvency. This is, of course, only fair as otherwise the creditor would be 100% liable on debts due to the insolvent and only receive the relevant distribution (often nothing) on debts owed by the insolvent.

−	Adjudication procedures constrain the effect of set off to preserve the public policy of adjudication that it should be a relatively speedy interim solution. In M J Gleeson Group Plc v Devonshire Green Holding Ltd~~, March~~ 2004, the court held that a respondent could not set off claims arising after the commencement of the adjudication to avoid payment of a sum awarded by the adjudicator. See also Section 111 (4) Housing Grants, Construction and Regeneration Act.	+	In construction contracts, rights of set off and withholding payments are regulated by the Housing Grants, Construction and Regeneration Act 1996 Part II Section 111, amended, with effect from October 2011, by the [[Local_Democracy,_Economic_Development_and_Construction_Act_2009\|Local Democracy, Economic Development and Construction Act 2009]] Part 8 Section 144. These Acts regulate the contents and prescribed periods for 'pay less' notices which must be served if a party wishes to deduct sums from amounts otherwise due under the contract.
		+
		+	Adjudication procedures constrain the effect of set off to preserve the public policy of adjudication that it should be a relatively speedy interim solution. In M J Gleeson Group Plc v Devonshire Green Holding Ltd [2004], the court held that a respondent could not set off claims arising after the commencement of the adjudication to avoid payment of a sum awarded by the adjudicator.
		+
		+	See also Section 111 (4) Housing Grants, Construction and Regeneration Act.

	= Find out more =		= Find out more =

150.204.106.74 at 15:15, 15 March 2018

2018-03-15T15:15:57Z

← Older revision		Revision as of 15:15, 15 March 2018
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−		+	Set off (sometimes called contra charging) is a legal process by which party A defends a claim brought by party B, by A setting off in extinction or diminution of B’s claim, claims which A alleges against B. n
−	Set off (sometimes called contra charging) is a legal process by which party A defends a claim brought by party B, by A setting off in extinction or diminution of B’s claim, claims which A alleges against B.	+

	For example:		For example:
−	*A client might reclaim the cost of water damage to their property caused by a contractor fitting out the floor above the damaged area.	+
−	*A contractor might set off costs against a sub-contractor that caused damage to finished work adjacent to the working area of the sub-contractor.	+	* A client might reclaim the cost of water damage to their property caused by a contractor fitting out the floor above the damaged area.
−	*In the case of late completion a client might set off the appropriate amount of liquidated and ascertained damages in accordance with the contract.	+	* A contractor might set off costs against a sub-contractor that caused damage to finished work adjacent to the working area of the sub-contractor.
		+	* In the case of late completion a client might set off the appropriate amount of liquidated and ascertained damages in accordance with the contract.

	Whilst set off is often accompanied by a counterclaim it is to be distinguished in that set off cannot, unlike a counterclaim, give rise to a positive balance of claim.		Whilst set off is often accompanied by a counterclaim it is to be distinguished in that set off cannot, unlike a counterclaim, give rise to a positive balance of claim.
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	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
−	*Abatement.	+
−	*Adjudication.	+	* Abatement.
−	*Alternative dispute resolution.	+	* Adjudication.
−	*Contracts.	+	* Alternative dispute resolution.
−	*Contract conditions.	+	* Contracts.
−	*Counterclaim.	+	* Contract conditions.
−	*Housing Grants, Construction and Regeneration Act.	+	* Counterclaim.
−	*Liquidated and ascertained damages.	+	* Housing Grants, Construction and Regeneration Act.
−	*Mediation.	+	* Liquidated and ascertained damages.
−	*Scheme for Construction Contracts.	+	* Mediation.
		+	* Scheme for Construction Contracts.

	=== External references ===		=== External references ===
−	*[http://www.legislation.gov.uk/ukpga/1996/53/contents Housing Grants, Construction and Regeneration Act].
−	*[http://www.legislation.gov.uk/ukpga/2009/20/part/8 Construction Act 2009.]
−	*Construction Week: [http://www.constructionweekonline.com/article-8040-all-about-the-set-off/ All about the set-off].

−	[[Category:Other_legislation]]	+	* [http://www.legislation.gov.uk/ukpga/1996/53/contents Housing Grants, Construction and Regeneration Act].
−	[[Category:Construction_management]]	+	* [http://www.legislation.gov.uk/ukpga/2009/20/part/8 Construction Act 2009.]
−	[[Category:Contracts_/_payment]]	+	* Construction Week: [http://www.constructionweekonline.com/article-8040-all-about-the-set-off/ All about the set-off].
−	[[Category:Procurement]]	+
		+	[[Category:Other_legislation]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Designing Buildings at 09:45, 28 November 2014

2014-11-28T09:45:40Z

← Older revision		Revision as of 09:45, 28 November 2014
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	*[http://www.legislation.gov.uk/ukpga/1996/53/contents Housing Grants, Construction and Regeneration Act].		*[http://www.legislation.gov.uk/ukpga/1996/53/contents Housing Grants, Construction and Regeneration Act].
	*[http://www.legislation.gov.uk/ukpga/2009/20/part/8 Construction Act 2009.]		*[http://www.legislation.gov.uk/ukpga/2009/20/part/8 Construction Act 2009.]
−	*[http://www.adjudication.co.uk/legislation/scheme.htm Scheme for Construction Contracts.]
	*Construction Week: [http://www.constructionweekonline.com/article-8040-all-about-the-set-off/ All about the set-off].		*Construction Week: [http://www.constructionweekonline.com/article-8040-all-about-the-set-off/ All about the set-off].

Designing Buildings at 05:53, 5 August 2014

2014-08-05T05:53:39Z

← Older revision		Revision as of 05:53, 5 August 2014
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	=== External references ===		=== External references ===
−	*[http://www.insolvency.gov.uk/freedomofinformation/technical/technicalmanual/Ch37-48/chapter40/part3/part3htm Statutory set off.]
	*[http://www.legislation.gov.uk/ukpga/1996/53/contents Housing Grants, Construction and Regeneration Act].		*[http://www.legislation.gov.uk/ukpga/1996/53/contents Housing Grants, Construction and Regeneration Act].
	*[http://www.legislation.gov.uk/ukpga/2009/20/part/8 Construction Act 2009.]		*[http://www.legislation.gov.uk/ukpga/2009/20/part/8 Construction Act 2009.]
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	*Construction Week: [http://www.constructionweekonline.com/article-8040-all-about-the-set-off/ All about the set-off].		*Construction Week: [http://www.constructionweekonline.com/article-8040-all-about-the-set-off/ All about the set-off].

		+	[[Category:Other_legislation]]
	[[Category:Construction_management]]		[[Category:Construction_management]]
	[[Category:Contracts_/_payment]]		[[Category:Contracts_/_payment]]
−	~~[[Category:Other_legislation]]~~
	[[Category:Procurement]]		[[Category:Procurement]]

Designing Buildings: moved Set off to Set off in construction contracts

2014-08-02T06:57:07Z

moved Set off to Set off in construction contracts

← Older revision

Revision as of 06:57, 2 August 2014

Designing Buildings at 08:30, 2 May 2014

2014-05-02T08:30:58Z

← Older revision		Revision as of 08:30, 2 May 2014
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	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
		+	*Abatement.
	*Adjudication.		*Adjudication.
	*Alternative dispute resolution.		*Alternative dispute resolution.
	*Contracts.		*Contracts.
	*Contract conditions.		*Contract conditions.
		+	*Counterclaim.
	*Housing Grants, Construction and Regeneration Act.		*Housing Grants, Construction and Regeneration Act.
	*Liquidated and ascertained damages.		*Liquidated and ascertained damages.

David Trench at 09:06, 16 September 2013

2013-09-16T09:06:55Z

← Older revision		Revision as of 09:06, 16 September 2013
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	If a contracting party becomes insolvent, the Insolvency Act 1986 Section 323 (bankruptcy) and the Insolvency Rules Rule 4.90 (liquidation) provide for a statutory set off known as ‘mutual credits and mutual debits’. This statutory set off requires account to be taken between the insolvent party and the proving creditor of mutual debts, mutual credits and mutual dealings arising before the insolvency which are then set off leaving only the balance, if any, provable in the insolvency. This is of course only fair as otherwise the creditor would be 100% liable on debts due to the insolvent and only receive the relevant distribution (often nothing) on debts owed by the insolvent.		If a contracting party becomes insolvent, the Insolvency Act 1986 Section 323 (bankruptcy) and the Insolvency Rules Rule 4.90 (liquidation) provide for a statutory set off known as ‘mutual credits and mutual debits’. This statutory set off requires account to be taken between the insolvent party and the proving creditor of mutual debts, mutual credits and mutual dealings arising before the insolvency which are then set off leaving only the balance, if any, provable in the insolvency. This is of course only fair as otherwise the creditor would be 100% liable on debts due to the insolvent and only receive the relevant distribution (often nothing) on debts owed by the insolvent.

−	In construction contracts, rights of set off and withholding payments are regulated by the ~~[http://www.legislation.gov.uk/ukpga/1996/53/contents~~ Housing Grants, Construction and Regeneration Act] 1996 Part II Section 111, amended, with effect from October 2011, by the [http://www.legislation.gov.uk/ukpga/2009/20/contents Local Democracy, Economic Development and Construction Act 2009] Part 8 Section 144. These Acts regulate the contents and prescribed periods for 'pay less' notices which must be served if a party wishes to deduct sums from amounts otherwise due under the contract.	+	In construction contracts, rights of set off and withholding payments are regulated by the Housing Grants, Construction and Regeneration Act 1996 Part II Section 111, amended, with effect from October 2011, by the [http://www.legislation.gov.uk/ukpga/2009/20/contents Local Democracy, Economic Development and Construction Act 2009] Part 8 Section 144. These Acts regulate the contents and prescribed periods for 'pay less' notices which must be served if a party wishes to deduct sums from amounts otherwise due under the contract.

	Adjudication procedures constrain the effect of set off to preserve the public policy of adjudication that it should be a relatively speedy interim solution. In M J Gleeson Group Plc v Devonshire Green Holding Ltd, March 2004, the court held that a respondent could not set off claims arising after the commencement of the adjudication to avoid payment of a sum awarded by the adjudicator. See also Section 111 (4) Housing Grants, Construction and Regeneration Act.		Adjudication procedures constrain the effect of set off to preserve the public policy of adjudication that it should be a relatively speedy interim solution. In M J Gleeson Group Plc v Devonshire Green Holding Ltd, March 2004, the court held that a respondent could not set off claims arising after the commencement of the adjudication to avoid payment of a sum awarded by the adjudicator. See also Section 111 (4) Housing Grants, Construction and Regeneration Act.