Payments Under Building Contracts: It Pays To Be On Time!

It is a fair to say that the payment regime under the Construction Act (the Act) is complicated. In the recent decision of the Technology and Construction Court (TCC) in Henia Investments Inc v Beck Interiors Ltd Mr Justice Akenhead acknowledged that the statutory requirements in the Act "have led to unnecessarily complex provisions, not least those dealing with the consequences of failure to comply with timing provisions".

The Act requires every construction act to provide an adequate mechanism for determining what payments become due and when they should be paid. Once agreed, the payment provisions should be strictly complied with. Failure to do so increases the risk of a contractor suspending all or part of its works which in turn may interrupt the programme and have an impact on progress.