Did you realise that alterations have been made to the Construction Act 1996 from the 1st October 2011? It's crucial that you stay as up to date as you can with all the current laws - this short article will share the alterations with all of you. The adjustments are referred to as Part 8 of the Local Democracy, Economic Development and Construction Act 2009 (LDEDCA) and as a result of these adjustments the Scheme for Construction Contracts has been revised as well.
The first change is the identification of payments that falls under the Construction Contract and the right to withhold payment has been rewritten. There's now a beefed up necessity for the management to offer a payment notice specifying how much he considers to be given to the contractor. If the employer does not serve this notice, then the contractor has the right to serve his own default payment notice which sets out what he considers to be paid. Whatever amount is specified in the payment notice needs to be paid unless a withholding notice is served. This basically means that loopholes have been extracted which beforehand permitted employers to prevent payment in circumstances where they had failed to serve without having a withholding notice. This change is likely to increase certainty and cash flow.
A further alteration is that 'pay when certified' clauses have been taken out. It's now not lawful to make payment conditional upon performance under another contract. It'll also be unlawful for a sub-contract to have a clause that says the sub-contractor only gets paid when the main contractor's application is authorized by the architect or engineer acting under the primary contract. There is a limited exception for 'management contracting'.
Following on from that, the adjudication laws have been altered to outlaw conditions that make one party liable for costs of adjudication no matter what the outcome. Also, a contractor is now able to claim an extension of time for any period of valid suspension or delay such as winding down, which has enhanced their right to suspend performance for non-payment. The defaulting party is also required to give the contractor reasonable costs and costs incurred in suspending performance.
The last change is that the Construction Act has now been elongated to cover contracts that are purely oral or only partially recorded on paper. If you have any kind of questions about the alterations to the Construction Act of 1996, then it's highly suggested that you go and speak to your solicitor.
Gosschalks is a trusted legal firm that specialises in this area. If you wish to find out any more information about this, a good idea would be to turn to Gosschalks.
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