Industry
“Under the legislation, the definition of 'construction' is quite wide ranging and includes virtually all landscape, sports ground construction and drainage work, including design and consultancy”
default regulations. Where an agreement or contract does not provide for interest on overdue payment, then the Late Payment Legislation may also apply.
What work is covered?
Under the legislation, the definition of ‘construction’ is quite wide ranging and includes virtually all landscape, sports ground construction and drainage work, including design and consultancy. All sizes of project are covered and the legislation has been drafted so as to preclude avoidance.
The legislation to date does not, however, cover ordinary householders employing a contractor, whilst there are some exceptions for specific types of operation.
The legislation on late payment is of more general application and confers
rights on businesses to charge interest on overdue payments for business to business transactions. It also sets limits on the period for payment.
What does all this mean?
All this means that, if a sports club or any other organisation has construction work carried out and is presented with a bill*, then there are two choices;
- pay the amount invoiced promptly
- inform the contractor, in writing, how much, if anything, is to be paid and the reasons payment is to be less than that requested
Not only must this be done, it must be done within the time allowed under the Contract or under the Regulations.
If a club fails to act, then there may be
consequences. The first is that the club may be deemed to have accepted that payment is due and, in consequence, is responsible for paying the full amount of the bill or invoice.
If the club fails to pay within the
prescribed time, then the contractor can, on giving seven days notice, suspend work. If such suspension results in extra work, then the club is legally bound to pay for any extra costs.
In the first instance, this would simply
be a breach of contract that could be remedied by the payment of the overdue amount. If, however, the payment is not made after an extended period this may put the club in ‘Default of Contract’. Default is a more serious issue and the contractor can, having served notice, terminate the contract and vacate the site. The club would remain liable for the DECEMBER/JANUARY 2014 PC 103
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