Construction Debate Online

The Scheme for Construction Contracts is a statutory instrument created pursuant to the Act, which sets out a "fall-back" position for construction contracts that do not contain the requisite payment mechanisms or adjudication procedures within the Act (see 'Existing Provisions'). Where a construction contract does not contain the necessary provisions and does not therefore that comply with the Act, the terms of the Scheme are implied into the contract . The payment provisions are implied on a piecemeal basis, the adjudication provisions are implied as a whole;

Under the Act the following matters must be covered:
The Scheme for Construction Contracts: If any of the matters opposite are not agreed, these terms will prevail:

1. Stage Payments
• Unless the work is expected to take less than 45 days the Contractor or Consultant is entitled to be paid in instalments.

• The amounts and intervals must be capable of being ascertained

1. Stage Payments
• If instalments do not apply the price is due 30 days after completion, or when claimed, whichever is the later.

• If instalments apply, the period is every 28 days from commencement of work

2. How much & when?
• The contract must provide ‘an adequate mechanism’ for determining what amount is due. How the amount is calculated must be shown.

• When the amount is due must also be shown, to be noted is that the ‘due date’ is not the same as the date by when it must be paid.

• The contract must provide ‘an adequate mechanism’ for determining what amount is due. How the amount is calculated must be shown.

2. How much & when?
• The amount payable is in respect of the value of work performed since commencement until the end of the 28 day period, including materials on-site and any other sums specified as payable by the contract. The total cannot exceed the contract price.

• Interim payments are due 7 days after the end of the 28 day period or when claimed, if later.

• The final payment is due 30 days after completion or when claimed if later

3. The final date for payment
• The contract must show the final date for payment of each interim and final application. This is the last date by when the payment must be made.

3. The final date for payment
• The final date for payment is 17 days after the sum became due.

4. The first notice
• The contract must provide for the paying party to give a notice identifying the amount it considers is due together with the basis of that assessment.

• This notice must be given no later than 5 days after the due date. It can be given in less than 5. 4. The first notice
• Notice of the amount and basis of calculation is to be given no later than 5 days from the due date.

5. The withholding notice
• If the paying party wants to withhold or set-off any sum from the amount due it must serve a notice stating how much is intended to be withheld and each ground for doing so.

• The contract has to specify how long before the final date for payment this notice is to be given.

• It is possible to combine the two notices

5. The withholding notice
• Any notice to withhold has to be no later than 7 days before the final date for payment.

Under the Act the following matters must be covered:		The Scheme for Construction Contracts: If any of the matters opposite are not agreed, these terms will prevail:
1. Stage Payments • Unless the work is expected to take less than 45 days the Contractor or Consultant is entitled to be paid in instalments. • The amounts and intervals must be capable of being ascertained		1. Stage Payments • If instalments do not apply the price is due 30 days after completion, or when claimed, whichever is the later. • If instalments apply, the period is every 28 days from commencement of work
2. How much & when? • The contract must provide ‘an adequate mechanism’ for determining what amount is due. How the amount is calculated must be shown. • When the amount is due must also be shown, to be noted is that the ‘due date’ is not the same as the date by when it must be paid. • The contract must provide ‘an adequate mechanism’ for determining what amount is due. How the amount is calculated must be shown.		2. How much & when? • The amount payable is in respect of the value of work performed since commencement until the end of the 28 day period, including materials on-site and any other sums specified as payable by the contract. The total cannot exceed the contract price. • Interim payments are due 7 days after the end of the 28 day period or when claimed, if later. • The final payment is due 30 days after completion or when claimed if later
3. The final date for payment • The contract must show the final date for payment of each interim and final application. This is the last date by when the payment must be made.		3. The final date for payment • The final date for payment is 17 days after the sum became due.
4. The first notice • The contract must provide for the paying party to give a notice identifying the amount it considers is due together with the basis of that assessment. • This notice must be given no later than 5 days after the due date. It can be given in less than 5.		4. The first notice • Notice of the amount and basis of calculation is to be given no later than 5 days from the due date.
5. The withholding notice • If the paying party wants to withhold or set-off any sum from the amount due it must serve a notice stating how much is intended to be withheld and each ground for doing so. • The contract has to specify how long before the final date for payment this notice is to be given. • It is possible to combine the two notices		5. The withholding notice • Any notice to withhold has to be no later than 7 days before the final date for payment.