Are you a construction subcontractor trying to get paid?
Your subcontract may appear to allow the main contractor to delay payment to you, or the main contractor’s QS may be telling you (often in good faith) that you are not entitled to payment yet, but in both cases your claim for prompt payment (and interest on late payment ) may be much stronger than you think.
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Pay when paid
“Pay when Paid” clauses are often unlawful; if it is unlawful, you can get paid whether or not the client has paid your contractor. Why wait?
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Check the fine print
There are a number of other circumstances where the contract terms regarding your payments or your retention release may not comply with legal requirements, in which case you may be entitled to payment even if the contract appears to say otherwise.
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Liquidated Damages
“Liquidated Damages” are often not lawfully deductible against you. If a contractor is threatening you with LADs, find out whether he is bluffing or not.
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Retention Release
Retention Release should be applied for, don’t just wait for it to appear. The main contractor is likely to be in breach of contract if they don’t pay it to you on the date specified.
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Defects
Not every “defect” prevents practical completion being achieved; don’t be pressured into doing more work than you need or want to; know the minimum you need to do to secure release of your retention.
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Practical Completion
Practical completion can sometimes depend on whether or not you have provided the contractor with certain paperwork; make sure all paperwork is prepared well in advance of completion of your works, to ensure no delays in payment.
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Certificate of making good
If your retention release depends on a certificate of making good: [a] that may not be lawful; [b] if it is, is the main contractor proceeding diligently to make good? If not, you may be entitled to payment of your retention without the certificate.
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QS
If you have agreed to work on day-rates and you have complied with the contract paperwork requirements regarding those, the QS can’t simply impose their own view as to how long you should have taken on the job or the skills (within reason) of the operatives you have put on the job; don’t be intimidated!
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Extensions of Time
If completion of your contract is delayed by circumstances that you are not in control of, make sure you write to the main contractor telling them of the delay, the cause of it and how much more time you need – and then apply for an Extension of Time.
If you are struggling to get paid a sum of money that you think should properly and fairly be paid to you now (or some time ago or soon), do get a professional second opinion on your contract terms and what you are entitled to. Even if you trust the QS absolutely, he or she is not a lawyer – verify and validate what they are telling you.
Written by Chris Agace
Principal at My Inhouse Lawyer
One of our values (Growth) is, in many ways, all about cultivating a growth mindset. We are passionate about learning, improving and evolving. We learn from each other, use the best know-how tools in the market and constantly look for ways to simplify. Lawskool is our way of sharing with you. It isn’t intended to be legal advice, rather to enlighten you to make smart business decisions day to day with the benefit of some of our insight. We hope you enjoy the experience. There are some really good ideas and tips coming from some of the best inhouse lawyers. Easy to read and practical. If there’s something you’d like us to write about or some feedback you wish to share, feel free to drop us a note. Equally, if it’s legal advice you’re after, then just give us a call on 0207 939 3959.
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