Last edited 18 Jul 2016

Scheme for Construction Contracts

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[edit] Introduction

The Scheme for Construction Contracts (England and Wales) Regulations (also known as The Scheme for Construction Contracts) is a scheme which applies when construction contracts do not comply with the Housing Grants, Construction and Regeneration Act.

The Scheme either supplements the provisions of the contract where it has deficiencies relative to the requirements of the Housing Grants, Construction and Regeneration Act, or replaces the contract where it is non-compliant. This enables construction contracts to remain remain capable of performance, whilst allowing regulatory control over their provisions.

Part 1 of the Scheme makes provision for adjudication where the contract does not comply with the requirement for adjudication in the Housing Grants, Construction and Regeneration Act. Part 2 of the Scheme replaces those provisions in relation to payment that do not comply with the Housing Grants, Construction and Regeneration Act.

[edit] The Housing Grants, Construction and Regeneration Act

The Housing Grants, Construction and Regeneration Act applies to all contracts for 'construction operations' (including construction contracts and consultants' appointments). The Act sets out requirements relating to payment and adjudication:

  • The right to be paid in interim, periodic or stage payments.
  • The right to be informed of the amount due, or any amounts to be withheld.
  • The right to suspend performance for non-payment.
  • The right to adjudication.
  • Disallowing pay when paid clauses.

Where the contract does not comply with these requirements, then the detailed procedures set out in the schedule of the scheme will apply.

[edit] 2011 amendments to the Housing Grants, Construction and Regeneration Act

The Housing Grants, Construction and Regeneration Act was amended in October 2011 to close loop holes within its provisions and the scheme was amended so that its detailed procedures reflect these amendments.

The act now applies to construction contracts including those that are not in writing (adjudication clauses must still be in writing).

It is no longer be allowable to define within a contract who should bear the cost of adjudication, and adjudicators have the right to correct errors in contracts within 5 days of delivering a decisions.

Specific changes have been made regarding procedures for making payments:

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