When is a contractor entitled to interim payment for materials held off site?

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Legal and contractual solutions - Payment

When does a contractor or subcontractor become entitled to interim payment for materials held off site?

Off-site materials, express provision and the conditions

Interim 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 its conditions.

Quick answer

Only where the contract makes specific provision and its conditions are met: off-site materials are paid only if the form provides for it, so JCT 2011, the ICE Editions and GC/Works/1 allow it on listed and identified items subject to proof of ownership, insurance, identification and sometimes a bond, while the Engineering and Construction Contract makes no provision at all

Only where the contract makes specific provision and its conditions are met. Interim payments normally cover work done and materials on or adjacent to the site, but off-site materials are paid only if the form provides for it, because paying for goods held off site exposes the employer to disputes over identity and ownership if the contractor becomes insolvent before delivery. JCT 2011, by clause 4.17, allows listed off-site items, uniquely identified or not, subject to ownership being vested in the contractor, proper insurance, clear identification of the employer's interest, and sometimes a bond. The ICE 6th Edition, clause 65(1)(c), and 7th Edition, clause 60(1)(c), allow payment for off-site materials identified in an appendix to the tender, and GC/Works/1, condition 48C, allows payment for things off site if stated in the abstract of particulars, subject to proof of ownership, identification and storage, and does not apply in Scotland. The Engineering and Construction Contract makes no provision for off-site goods.

General ruleOff-site materials are paid only where the form provides for it
Employer riskInsolvency before delivery raises identity and ownership disputes
JCT 2011Clause 4.17 listed items; ownership, insurance, identification, optional bond
ICE and GC/Works/1Allowed on identified items in the appendix or abstract of particulars
ECCNo provision for payment for off-site goods

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