We all know how expensive building works can become. In some
industries, it is not unheard of for projects to be priced in
excess of $10bn. Obviously, the contractor whose job it is to get
the labour and materials on site and coordinate the complex
workflows would not survive too long financially if they did not
get paid during the course of the works. This is why construction
contracts invariably provide for progress payments, either because
the contract expressly provides for it, or because it is an implied
term under the Construction Contracts Act.
It is important to remember, though that progress payments are
interim payments on account only. Where the contract is a lump sum
or fixed price contract that sets out a scope of works and a price
to be paid to the contractor for completing it, the principal does
not become indebted to the contractor for any part of the contract
price until the works are substantially completed. Substantial
completion means completion of
