If a construction contract gives you a choice whether to
exercise a contractual election, then you need to communicate
clearly your decision to affected parties like subcontractors.
Otherwise the Court may take the matter out of your
hands.
That is the lesson from a recent High Court
case1 about the construction of a supermarket
carpark in Christchurch.
The context
The subcontractor, CSC, had submitted five payment claims to the
head contractor, Watts & Hughes. Four of those claims had been
received after the "Due Date" of the 25th of each
month.
Under clause 5(c) of the Master Builders Standard Form of
Subcontract, Watts & Hughes had a discretion to treat each late
claim as if it had been received on the 25th of the following month
(the next Due Date), postponing its obligation to issue a payment
schedule by a month.
