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1.  Introduction

Martin Wood Chartridge Books Oxford ePub

Chapter 3

How the Act affects your payment terms

1.     Introduction

2.     Payment Terms - the New Rules

(a)      Stage Payments - entitlement

(b)      How much is to be paid?

(i)          The Scheme for Construction Contracts - Interim payments

(ii)         The Scheme for Construction Contracts - Final payments

(c)     When are payments due?

(d)     The final date for payment

(e)     Restrictions on pay when paid

(3)     Notices and Deductions

(a)     Payment Notices

(b)     Notice of Intention to Withhold Payment

4.       Key Points Summary

1.   Introduction

The new rules introduced by the Act in relation to payment are likely to have more day to day impact on the construction industry than any of the other provisions. Whilst the new adjudication rules are a radical change to previous dispute resolution procedures, those procedures are only likely to be used infrequently. The new payment rules will apply to each contract each month. The new rules have resulted in substantial amendments to most standard form contracts and professional appointments. The new rules can conveniently be broken down into:

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Appendix 3  The Construction Contracts Exclusion Order 1998

Martin Wood Chartridge Books Oxford ePub

Appendix 3

Construction Contracts Exclusion Order

The Construction Contracts (England and Wales) Exclusion Order 1998

Citation, commencement and extent

1.-     (1)     This Order may be cited as The Construction Contracts (England and Wales) Exclusion Order 1998 and shall come into force at the end of the period of 8 weeks beginning with the day on which it is made (“the commencement date”).

(2)     This Order shall extend to England and Wales only.

Interpretation

2.     In this Order, “Part II” means Part II of the Housing Grants, Construction and Regeneration Act 1996.

Agreements under statute

3.     A construction contract is excluded from the operation of Part II if it is-

(a)     an agreement under section 38 (power of highway authorities to adopt by agreement) or section 278 (agreements as to execution of works) of the Highways Act 1980;

(b)     an agreement under section 106 (planning obligations), 106A (modification or discharge of planning obligations) or 299A (Crown planning obligations) of the Town and Country Planning Act 1990;

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(b)  ACE

Martin Wood Chartridge Books Oxford ePub

Chapter 5

How has the Act changed the Standard Forms?

1.     Introduction

2.     Building Contracts-JCT 80 Amendment 18

3.     Professional Appointments

(a)     RIBA

(b)     ACE

4.     Sub-Contracts-DOM/1 Conditions

5.     Key Points Summary

1.   Introduction

The updating of the various standard form contracts and professional appointments has been a haphazard process, for example, the DOM/1 Conditions had not been amended since 1990 not withstanding that during that period JCT 80, to which DOM/1 is intended to be compatible, had been amended several times. The amendment of professional appointments was also an ad hoc process often related to the introduction of new legislation, for example, the CDM Regulations119. The implementation of the Construction Act on 1 May 1998 was of such significance to the industry that virtually all publishers of standard forms have had to reconsider their conditions to make them Construction Act compliant.

There has also been a substantial amount of revision of bespoke agreements to ensure the adherence to the mandatory provisions of the Act. Some publishers such as the JCT have taken the opportunity to introduce not only Construction Act compliant rules but also various other recommendations of the Latham Report that did not find their way into the Act. This has not, however, applied to all standard forms as some publishers have taken a much more restrictive view and suggested limited amendments to make the forms Construction Act compliant, for example, the ICE. Whilst it is not practical to review all of the standard forms, examples of the changes that have been made to building contracts, professional appointments and sub-contracts are set out in this chapter.

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(b)  Notice of Intention to Withhold Payment

Martin Wood Chartridge Books Oxford ePub

Chapter 3

How the Act affects your payment terms

1.     Introduction

2.     Payment Terms - the New Rules

(a)      Stage Payments - entitlement

(b)      How much is to be paid?

(i)          The Scheme for Construction Contracts - Interim payments

(ii)         The Scheme for Construction Contracts - Final payments

(c)     When are payments due?

(d)     The final date for payment

(e)     Restrictions on pay when paid

(3)     Notices and Deductions

(a)     Payment Notices

(b)     Notice of Intention to Withhold Payment

4.       Key Points Summary

1.   Introduction

The new rules introduced by the Act in relation to payment are likely to have more day to day impact on the construction industry than any of the other provisions. Whilst the new adjudication rules are a radical change to previous dispute resolution procedures, those procedures are only likely to be used infrequently. The new payment rules will apply to each contract each month. The new rules have resulted in substantial amendments to most standard form contracts and professional appointments. The new rules can conveniently be broken down into:

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Medium 9781902375205

Appendix 4  Abbreviations

Martin Wood Chartridge Books Oxford ePub

Appendix 4

Abbreviations

The Act:

The Housing Grants, Construction and Regeneration Act 1996

The Scheme:

The Scheme for Construction Contracts (England and Wales) Regulations 1998

The Exclusion Order:

The Construction Contracts (England and Wales) Exclusion Order 1998

CDM Regulations:

The Construction (Design and Management) Regulations 1994

The Latham Report:

Constructing the Team, Sir Michael Latham, 1994 (HMSO)

ACE:

Association of Consulting Engineers

CIC:

Construction Industry Council

ICE:

Institution of Civil Engineers

JCT:

Joint Contracts Tribunal

ORSA:

Official Referees Solicitors Association (now called the Technology and Construction Solicitors Association (TeCSA))

RIBA:

Royal Institute of British Architects

RICS:

Royal Institute of Chartered Surveyors

the DOM/1 Conditions:

The Sub-Contract Conditions for use with the Domestic Sub- Contract DOM/1 Articles of Agreement

JCT 80:

The standard form of Building Contract 1980 Edition published by the JCT

ANB:

Adjudicator Nominating Body

PFI:

Private Finance Initiative

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