Service of Payment and other notices

There are a huge number of disputes referred to adjudication that focus on whether the payment mechanism has been properly adhered to and whether the right to suspend works has been lawfully exercised.

We can advise you on your obligations, the notices you should serve, and when you should serve them. This extends to acts which the contract states must be done – for any entitlement to something such as a payment, a variation, extension of time or loss and expense to arise.

Construction contracts often set out a payment mechanism which stipulates:

  • When a party is to submit interim applications
  • When a party is obliged to serve a notice stating the sum assessed as being due – and the basis of how that was calculated
  • When other notices must be served – if a paying party intends to pay less than the sum due – and the consequences of failing to do so

In the absence of such terms, the Housing Grants Construction and Regeneration Act 1996 (commonly referred to as ‘the Construction Act’) will impose such terms. The Contract or the Construction Act also introduced the right to give notice of the intention suspend work, if money that was due had not been paid by the end of the notice period stipulated. It also made unlawful certain practices such as ‘pay when paid’ clauses.