Banner Image

Legal News

Failure to Comply With Contract Timings Costs Building Company

Timing stipulations in commercial contracts can be inflexible and failure to comply with them can be very costly indeed. In a recent case, a building company's failure to submit an interim application for payment on time has resulted in a considerable delay in the receipt of more than £480,000.

The company had been employed by a local authority to build new classrooms for a primary school. The contract provided for payment to be made in instalments but required that applications for payments had to be served on particular dates.

When the council refused to pay an interim bill for £484,759, the company referred the dispute to an adjudicator who directed the council to meet the demand. However, in upholding the council's challenge to that decision, the High Court found that the company's application for payment was invalid in that it had been submitted six days earlier than it should have been.

The payment schedule laid down in the contract was strict and its terms had not been waived by the council. In those circumstances, the company was ordered to repay the money to the council. The Court, however, acknowledged that the company may be entitled to a further payment when it submits its final account.

Cash flow is often critical to the successful management of building projects, and failure to adhere to the agreed regime for payments can cause significant difficulties.

For more information or to speak to one of our experts, please call us on 01606 48777

Get in touch

  • "Extremely fair, understanding, caring and knowledgeable in all aspects of family law."

    Mr P
  • "Amazing attitude and caring towards its customers in life's most stressful situations."

    Anonymous
  • "Highly recommend the conveyancing services. Extremely satisfied with the overall level of service provided - kept me informed at every stage, providing good information and advice."

    Heather Woolley
  • "Excellent efficient will-writing service from very friendly staff. Everything explained to us so that we understood it. Fantastic!"

    Jane Imisson
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.