Provisions the documents cite: Part II ss.104–113 — ss.104–106 (construction contract, construction operations, residential occupier excluded — s.106(2)), s.107 (repealed from 1 October 2011), s.108 (adjudication), s.109 (stage payments), s.110 (payment mechanism and final date for payment), s.110A (payment notices), s.110B (payee's notice in default of payer's notice), s.111 (requirement to pay the notified sum; pay less notice), s.112 (suspension for non-payment), s.113 (conditional payment provisions ineffective)
What it requires
s.109 — a party to a construction contract is entitled to payment by instalments, stage or other periodic payments unless the work is specified, or agreed to be estimated, to last less than 45 days; the parties agree the amounts and intervals, failing which the Scheme for Construction Contracts applies. s.110 — every construction contract must provide an adequate mechanism for determining what payments become due and when, and a final date for payment; a mechanism that makes payment conditional on performance of obligations under another contract, or fixes the due date by reference to the giving of a notice of what is due, is not adequate (s.110(1A)–(1D)). s.110A — the contract must require either the payer (or a specified person) or the payee to give a notice not later than five days after the payment due date, specifying the sum considered due at that date and the basis on which it is calculated; the sum may be zero. s.110B — where the payer's notice is not given as required, the payee may give its own notice at any time afterwards and the final date for payment is postponed by the number of days' delay; a payee's application the contract permits or requires before that date counts as the payee's notice. s.111 — the payer must pay the notified sum by the final date for payment, unless a notice of intention to pay less, specifying the sum considered due and its basis, is given not later than the prescribed period before the final date (the period the parties agree, or the Scheme period); where an adjudicator decides more is due than a notice stated, the extra is payable by the later of seven days from the decision and the original final date. s.112 — where the notified sum is not paid, the payee may suspend any or all of its obligations after giving at least seven days' notice stating the grounds; the party in default pays the reasonable costs and expenses of the suspension, and the period of suspension is disregarded in contract time limits. s.113 — a provision making payment conditional on the payer receiving payment from a third person is ineffective unless that third person (or one further up the chain) is insolvent. s.108 — a party may refer a dispute to adjudication at any time; the contract must secure appointment and referral within 7 days of the notice, a decision within 28 days of referral (extendable by 14 days with the referring party's consent, or longer by agreement), an impartial adjudicator who may take the initiative on facts and law, and a decision binding until final determination; a contract that does not comply takes the Scheme's adjudication provisions. Part II applies to construction contracts relating to operations in England, Wales or Scotland (s.104(6)) and not to a contract with a residential occupier (s.106). A construction contract with a residential occupier is one which principally relates to operations on a dwelling — a dwelling-house or a flat — which one of the parties to the contract occupies, or intends to occupy, as their residence (s.106(2)). s.107 (provisions applicable only to agreements in writing) was repealed in England and Wales from 1 October 2011 by the Local Democracy, Economic Development and Construction Act 2009, so Part II applies to oral and partly written construction contracts too.
The instrument itself: https://www.legislation.gov.uk/ukpga/1996/53/part/II. The summary above is our plain-English reading, not the text of the instrument — always work from the source.
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The 11 documents that cite it
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