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Payment provisions of the Construction Act

By: Contributor(s): Series: Contract Journal ; 418(6423) 24 April 2003, 22(1) | Construction News ; (6816) 15 May 2003, 22(1)Publication details: 2003Subject(s): Online resources: Summary: Recent case "Hills Electrical and Mechanical plc v Dawn Construction Ltd" (CSOH, 7 April 2003) raised the issue of the manner in which provisions of the scheme for the construction contracts may be imported into a contract in the event that certain payment provisions of that contract fail to comply with the Housing Grants, Construction and Regeneration Act 1996. When a third party employer became insolvent Hills (H) sued Dawn (D) for the money it claimed it was owed, despite D refusing to pay under a pay when paid clause. H argued the date for payment predated the insolvency. H failed as judge ruled that D had 28 days to pay, not 17 days as would have been correct under s110 of the 1996 Act. Concludes that where a contract fails to provide payment terms in accordance with the requirements of the Act, it is only the relevant provisions of the Scheme for Construction Contracts which will be imported into the subcontract in order to rectify the deficient term.
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Item type Current library Call number Copy number Status Barcode
Journal article London Journal article ABS66765 (Browse shelf(Opens below)) 1 Available 122589-1001

Recent case "Hills Electrical and Mechanical plc v Dawn Construction Ltd" (CSOH, 7 April 2003) raised the issue of the manner in which provisions of the scheme for the construction contracts may be imported into a contract in the event that certain payment provisions of that contract fail to comply with the Housing Grants, Construction and Regeneration Act 1996. When a third party employer became insolvent Hills (H) sued Dawn (D) for the money it claimed it was owed, despite D refusing to pay under a pay when paid clause. H argued the date for payment predated the insolvency. H failed as judge ruled that D had 28 days to pay, not 17 days as would have been correct under s110 of the 1996 Act. Concludes that where a contract fails to provide payment terms in accordance with the requirements of the Act, it is only the relevant provisions of the Scheme for Construction Contracts which will be imported into the subcontract in order to rectify the deficient term.