Construction Contracts Act 2013

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Payments under construction contracts.

3.— (1) A construction contract shall provide for—

(a) the amount of each interim payment to be made under the construction contract, and

(b) the amount of the final payment to be made under the construction contract,

or for an adequate mechanism for determining those amounts.

(2) A construction contract shall provide for—

(a) the payment claim date, or an adequate mechanism for determining the payment claim date, for each amount due under the construction contract, and

(b) the period between the payment claim date for each such amount and the date on which the amount is so due.

(3) The Schedule shall apply to a main contract if and to the extent that it does not make provision for the matters specified in subsections (1) and (2).

(4) The Schedule shall apply to a subcontract except to the extent that it makes provision which is more favourable to the executing party than that which would otherwise be made by the Schedule .

(5) Except after the occurrence of the circumstances specified in subsection (6), a provision in a construction contract is ineffective to the extent that it provides that payment of an amount due under the construction contract, or the timing of such a payment, is conditional on the making of a payment by a person who is not a party to the construction contract.

(6) The circumstances referred to in subsection (5) are:

(a) where the other person is a company other than an unregistered company—

(i) the commencement of its winding up pursuant to section 251 of the Companies Act 1963 where no declaration of solvency has been made under section 256 of the Companies Act 1963 ,

(ii) the presentation of a petition to wind it up pursuant to section 213 of the Companies Act 1963 ,

(iii) the appointment of a receiver in respect of any of its property or assets, or

(iv) the presentation of a petition for the appointment of an examiner under the Companies (Amendment) Act 1990 in relation to it;

(b) where the other person is an unregistered company, the commencement of its winding up pursuant to section 345 of the Companies Act 1963 ;

(c) where the other person is an individual or partnership, the making of an application for adjudication under the Bankruptcy Act 1988 in relation to it;

(d) the making of a winding up or similar order by a court in relation to the other person;

(e) the occurrence of any event corresponding to those specified in this subsection under the law of any state to which Council Regulation (EC) No. 1346/2000 of 29 May 2000 ¹ on insolvency proceedings applies.

¹ OJ No. L160, 30 June 2000, p.1.