Wise Up Wednesday: Applying The Payment Law

This week’s Wise Up Wednesday Guide for Specialist Contractors is about the all important topic of getting paid.

The “Payment Law” in the form of the Construction Act exists to protect you, but it can’t do that if you don’t apply it. It’s not difficult to get your head around it, so please don’t be put off by thinking it’s legal mumbo jumbo that only lawyers can understand.

On the 1 October 2011 things got even better for you, because the Act was revised to deal with bits that did not work or needed improving.  The new Act imposes obligations on paying parties, and these can be used by you to secure payment.

 Adequate Payment Mechanism?

Every construction contract (as defined in the Construction Act) must have an “adequate” payment mechanism.In very simple terms it must have a:

Payment Due Date – when the work must be valuedPayment Period – time between Payment Due Date and Final Date for Payment – latest date when payment can be made In any event,Mechanism that clearly determines the Payment Due Date and the Final Date for Payment.

If the contract payment terms do not meet these requirements, the provisions from the  Scheme for Construction Contracts will apply.

Payment Notices

There are strict requirements for both payer and payee to issue and manage payment notices which operate the payment mechanism.

All Notices must state the amount and the “basis” of calculation. So, you must be certain of what the Payment Due Date is as there is a requirement to serve a Payment Notice up to 5 days after the Payment Due Date. If this time period is missed it is a breach of contract with consequences.

Good News For You

This is all good news for you, because the vast majority of the time you are going to be the payee. And if the Contractor/Client payer is in breach by failing to serve a Payment Notice in 5 days, you can serve a Default Payment Notice.

However, most contracts require you to submit an application for payment, and in that case your application for payment automatically becomes the Default Payment Notice.

If a Default Notice is served there is no defence to the amount claimed if a Payless Notice is not served in the time specified.

Valid Payless Notice?

A Payless Notice is a final chance for the payer to value the works and withhold monies, thus trumping the Payment Notices or Default Payment Notice. However, the Payless Notice must be valid and must state the amount and basis for calculation, and it must be served on time.

The key thing about Payment Notices is that timing and content is critical to their validity, and if these Notices are not managed properly by the Contractor/Client you are entitled to challenge them.

Want To Know More?

Come  and discover the Secret Keys To Minimise Risk and Maximise Profit, that we have been putting into practice on behalf of Specialist Subcontractors for the last 28 years.

And they’re are being revealed at our July events;

“Understand Your Contract to Minimise Risk and Maximise Profit”

“Introduction To Contractual Awareness and Using JCT Subcontracts”

WHEN/WHERE IS IT? The dates and fast access venues are as follows;

 03 July – Birchwood Park and Country ClubDartford Close to M25 and M20

 04 July – Brooklands HotelWeybridge Close to M25, M3 and A3

17 July – The Jurys InnWatford Close to M1 and M25

18 July – Marriott Hotel Waltham Abbey Close to M25, M11 and A10

Here’s what your fellow Subcontractors said about our last event;

 “Easily digestible information delivered in an interesting and easy to understand format”

 “Very detailed and informative”

 “Very informative and well delivered”

 “We were struggling to get paid; not any longer!”


Session 1 – Contract Formation Session 2 – Introduction to JCT Contracts and Construction Act Session 3 – Time, Notices and Delay and Disruption Session 4 – Instructions, Variations and Maximising Return Session 5 – Getting Paid On Time and the Right Amount Session 6 – Resolving Conflicts and Disputes Session 7 – Putting It All Together   


Our events are exclusively for Specialist Contractors so you are in the friendly company of other Specialist Contractors, and everything is designed to provide a broad appeal for all Specialist Contractors staff including;

Estimators, Contracts Managers; Project Managers; Commercial Managers, Quantity Surveyors, Credit Controllers and Directors   


The Secrets To Getting Paid and Minimising Risk and Maximising Profit! Specialist Contractors don’t get paid because they don’t understand the contract or don’t apply it when they should. We will reveal all you need to know to enable you to understand the fundamentals of those subcontracts, and how to get paid.        


The value of this whole days training is £350 + VAT, however, you can get your Early Bird booking  discount and enjoy the reduced rates as follows;

10% discount when you book one place

20 % discount when you book 2 or more places

And if you are a member and StreetwiseSubbie Buddy (or join us now), you are eligible for even more heavily discounted preferential rates.

All rates are subject to VAT  

Booking couldn’t be simpler, just contact me directly on 01773 712116 or email me at tanya@streetwisesubbie.com to confirm your places.

But hurry our last round of seminars sold out very quickly.

Thanks and best regards



P.S. Please remember that we are here to provide solutions exclusively for Subcontractors. If you want the Secret Keys To Getting Paid Properly or have a payment problem, not sure what to do or just want a second opinion, then we are here for you. Please give us a call on 01773 712116, or email info@streetwisesubbie.com today.

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