When, if ever, may a contractor recover above a guaranteed maximum price?PremiumA guaranteed maximum price sounds absolute, but the phrase has no fixed meaning. Whether a contractor can be paid above the maximum turns entirely on which risks the contract transfers.

Is a 2.5 per cent cash discount conditional on paying on time, or may it be taken on late payment?FreeA cash discount ordinarily rewards prompt payment, but subcontractors find contractors paying late and deducting it anyway. Whether the discount survives late payment turns on the wording...

When is a contractor entitled to interim payment for materials held off site?PremiumInterim payments cover work and on-site materials as a matter of course. Payment for materials held off site is different, and depends on express provision in the contract and on meeting...

Can a contractor compel an employer to hold retention money in a separate, designated bank account?PremiumThe JCT forms make the employer a trustee of the retention. Whether that lets a contractor compel a separate bank account, and what happens if the contractor leaves it too late, is settled...

If the employer becomes insolvent, is the contractor liable to pay subcontractors when no further money is coming from the employer?PremiumWhen the employer fails, the argument moves down the chain to who bears the loss. Whether the main contractor must still pay its subcontractors turns on the pay-when-paid rules and on the...

Where payment is not made when due, may a contractor or subcontractor lawfully suspend performance?FreeLeaving site for non-payment is dangerous unless the law is on your side. Whether a temporary suspension is available, or only termination for repudiation, turns on whether the...

Where daywork records are submitted on time but left unsigned by the architect or engineer, how is the contractor's entitlement to payment affected?PremiumContractors submit daywork records on time and find them left unsigned. Whether that defeats payment turns on who then bears the burden of proof, and the answer favours the contractor who...

Where a daywork sheet has been signed, must it be certified for payment, and may a quantity surveyor reduce the recorded hours?PremiumA signed daywork sheet raises two questions: must the sum be certified, and may a quantity surveyor cut the hours? A signature confirms the hours were worked but does not promise payment...

Is a contractor bound by a markedly under-priced bill rate when the measured quantity turns out far larger than billed?PremiumThe instinct is to apply a low rate only up to the billed quantity and pay the excess fairly. The cases hold the opposite: an agreed rate governs the increased quantity, mistake and all.

Is a creditor bound by acceptance of a lesser sum in full and final settlement?PremiumDebtors press creditors to take less by a full and final form or a marked cheque. Whether the creditor is bound turns on consideration, and part payment alone will not discharge the debt.

On what grounds may a subcontractor resist a pay-when-paid clause?PremiumPay-when-paid clauses are far weaker than they look. They are controlled by statute, read strictly against the contractor, and cannot be used to reward the contractor's own default.

Once work has been certified and paid, may a later certificate reduce that valuation?PremiumInterim certificates keep businesses running, but they are only payments on account. Whether work certified and paid can be revalued downwards later, and who bears the loss, is settled by...

May a contractor set off an overpayment on one contract against sums due on another for a subcontractor's work?FreeWithholding an undisputed debt against contested claims on another contract needs a route of set-off. There are four, and most contested construction claims fit only one of them.

Where a contractor completes early, may the architect or engineer delay certification to match the employer's ability to pay?PremiumAn early-finishing contractor expects prompt certification, while an employer may want the money to fall due more slowly. The standard forms do not allow the certifier to hold back...

Where an architect or engineer undercertifies, is the contractor entitled to interest?PremiumInterest on undercertification has produced conflicting decisions. Whether a contractor recovers it turns on the form of contract and on whether the undercertification was an honest lower...

Can an architect or engineer refuse to certify on-site materials because the contractor cannot prove good title to them?PremiumCertifiers worried about the employer paying twice for materials sometimes want proof of title before certifying. The standard forms do not let them withhold certification on that ground.

Can an employer refuse to honour an architect or engineer certificate on the ground that it thinks the sum certified is wrong?PremiumA payment certificate was once treated as money in the hand. Under the construction payment legislation the employer must now pay the notified sum unless it serves a valid pay-less notice...

Where a cheque is issued for construction work, can it be stopped before it clears if the work turns out to be defective?PremiumDiscovering defective work after issuing a cheque tempts the payer to stop it. A cheque can be countermanded at the bank, but the law treats it as cash, so stopping it does not avoid...

Can a party avoid a payment agreement on the ground that it was made under economic duress?FreeMoney agreements are sometimes squeezed out by financial pressure. Whether the paying party is bound, or can escape for economic duress, depends on whether the pressure was illegitimate...

Under a standard form, can an employer be obliged to pay a contractor's application in full even though the sum is uncertified and overvalued?PremiumMost overvaluations are corrected in the next certificate. Under some JCT forms, an employer that misses a notice deadline must pay the contractor's application in full, overvalued or...

What is a project bank account, and where do its benefits and drawbacks lie?PremiumA project bank account pays subcontractors directly and quickly from a single fund the employer supplies. It speeds payment but does not settle disputes, and its strength on insolvency...

What is the difference between set-off and abatement?PremiumSet-off and abatement are often confused. One reduces a claim by a separate cross-claim; the other reduces the claim itself because the work is worth less, and the distinction carries...

Can a contractor withhold information such as as-built drawings and manuals because the employer owes money, and what remedies does non-payment give?PremiumA contractor cannot simply hold back documents it must supply, but non-payment gives it a right to suspend that reaches the documents, along with damages, interest and, in a serious case...

What must a valid pay-less notice under a construction contract specify, and when must it be served?FreeTo pay less than the notified sum a payer needs a valid pay-less notice. It must state the sum the payer considers due and the basis of it, and be served in time, or the notified sum must...

On what legal basis may interest be recovered where a contractual payment is made late?FreeLate payment strains cashflow, and interest is the compensation. The law now allows it by three routes, having moved from a starting position that refused interest for late payment of a...

Where a JCT interim payment falls due, the final date passes unpaid with no withholding notice, and the contractor then becomes insolvent, can the employer refuse to pay?PremiumA JCT interim sum falls due and is unpaid, then the contractor fails. Whether the employer can terminate and keep the money, despite serving no notice, was settled by the House of Lords...

Where professional services are provided on a risk basis, is there a point at which a right to payment arises?PremiumRisk-basis work pays only if the scheme proceeds, but it can outgrow what was expected. Whether a right to payment arises turns on whether the risk arrangement has ended and a chargeable...

Is serving a statutory demand and petitioning to wind up an effective way to collect a construction debt?PremiumA statutory demand and the threat of winding-up can prompt a reluctant debtor to pay. Against a genuinely disputed debt it fails, the petition can be restrained or dismissed, and its use...

Can a subcontractor be bound by a settlement between the employer and main contractor over the subcontractor's claim?FreeA main contractor settles with the employer over the subcontract work, and the subcontractor wants more. The subcontractor is not bound by that settlement, but a reasonable settlement is...

May a contractor decline to start work until satisfactory bank and trade references are supplied?PremiumSeeking references before starting work is sensible, but refusing to perform to force them is dangerous. Without a contract term requiring references, the refusal is a breach.