(ii) the basis on which that sum is calculated. (i) the sum that the person giving the notice considers to be due or to have been due at the payment due date in respect of the payment and the Architect or Contract Administrator) or by the payee itself. The person whom issues the notice is dictated by the contract, and can be either the payer, a “specified person” as dictated by the contract (i.e. The sum contained in a payment notice is “the notified sum”. The New Act amendments require construction contracts to provide that a payment notice is issued for every payment provided for by the contract. There was no obvious consequence for failing to comply with this requirement, indeed, as it was only the employer who could issue such notices it seemed to duplicate the certification process common in most construction contracts, and was often simply ignored. In its original form the Construction Act set out that the payer had to give notice specifying the amount of the payment made or proposed to be made, and the basis upon which the amount is calculated. The statutory requirementsįirst, a brief reminder of the relevant statutory provisions. Jonathan More provides a practical guide through the relevant cases.
However, as is so often the case when new law develops, even relatively clear legal principles often give rise to spin off issues, and questions.
The message appears relatively clear employers, get the payless notice process wrong at your peril. In the year since our last Annual Review the first wave of case law relating to these amended provisions has been reported. When the amendments to the Housing Grants (Construction and Regeneration) Act 1996 (“the Construction Act”) were introduced by Part 8 of the Local Democracy, Economic Development and Construction Act 2009 (“the New Act”) it was not entirely clear how the changes in the payment provisions section would impact on the behaviour of parties to construction contracts. Payment provisions in construction contracts
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