Are there circumstances in which a standard form requires an employer to pay the full amount of a contractor's application where the sum is uncertified and turns out to be overvalued?
Most 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 not.
Yes under some forms: where the employer or its agent fails to serve a payment notice or pay-less notice within the contractual timescale, JCT 1998 With Contractor's Design and JCT 2011 Design and Build oblige the employer to pay the sum in the contractor's application, even if overvalued, and the final statement becomes conclusive if not disputed in time, so the notice deadlines must be met
Yes under some forms. Where the employer or its agent fails to serve a payment notice or a pay-less notice within the contractual timescale, JCT 1998 With Contractor's Design and JCT 2011 Design and Build oblige the employer to pay the sum in the contractor's application in full, even if it is overvalued. Under JCT 1998, clause 30.3.5, a failure to respond within five days made the application payable; JCT 2005, by clause 4.10.5, changed that so only the amount properly due was payable; and JCT 2011 Design and Build, amended for the 2009 Act, reverts, so that if the payment notice is not issued on time or is deficient the contractor is entitled under clause 4.9.3 to the sum applied for, subject only to a pay-less notice under clause 4.9.4 given at least five days before the final date for payment. The final statement carries a like risk: it becomes conclusive as to the balance due unless the employer disputes it within the contractual period. Meeting the notice deadlines is essential, and the exposure is greatest near completion or on the contractor's insolvency, where an overpayment cannot be corrected later.
| JCT 1998 WCD | A missed notice made the application payable in full (clause 30.3.5) |
| JCT 2005 | Removed that risk; only the amount properly due was payable (clause 4.10.5) |
| JCT 2011 D&B | Reverts; the application is payable unless a pay-less notice is served |
| Pay-less notice | At least five days before the final date for payment |
| Final statement | Becomes conclusive if not disputed within the contractual period |
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