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Streetwise Answers

Hi Streetwise

We are owed retention money on a construction project..

A stubborn electrical contractor is refusing to pay a retention that is well past it's due date. The reason he states is that the main contractor (MC) has gone bust owing him all retention monies. He was sub-contracted to the MC and we were sub-contracted to him.

He is saying that in construction law if the MC goes bust the sub-contractor does not have to pay his sub-contractors.

Is this the case or is he spinning a line?

Nurse Call Systems Installer


The answer is that it all depends on what the contract says.

If the contract is silent on the matter then he has no automatic right to withhold payment in the event of inslovency of the main contractor.

If the contract has an express provision stating that in the event that the Employer becomes insolvent, he does not have to pay you, then unfortunately that would be binding.

However, if he has been paid money that was definitely for you e.g. the retention had already been released prior to the insolvency, then you would be entitled to be paid whatever he had been paid on account of your works.

So check that contract and if you need any further assistance please contact us on or call us on 01773 7122116.

Best regards


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