PRACTICE AREA 06
Financial and Payment Disputes
Progress payments, price differences, deductions, receivables and final accounts in construction contracts.
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Frequently asked questions
- May the contractor terminate the contract where the contracting authority fails to pay a progress payment?Delay in payment by the contracting authority may give the contractor rights in respect of the debt and default; however, the contractor's power to bring a public procurement contract to an end unilaterally is separately limited by the Law.
- Before which court are disputes over progress payments and price adjustment heard?Monetary claims arising from performance of the contract are mostly heard before the civil courts; however, the nature of the act challenged must be examined separately. Jurisdiction, venue and the conditions for bringing proceedings are determined by the particular contract.
- May interest or enforcement proceedings be claimed for an unpaid progress payment?Default, interest and compulsory enforcement may arise in respect of a contractual debt that has fallen due and remains unpaid. Commencing enforcement before the amount and the date of maturity are settled may give rise to a fresh dispute.
- May a deduction be made from the performance bond at the time of a progress payment?The purpose of the performance bond is to secure due performance of the contract. For a deduction to be made from the guarantee or from a progress payment, there must be a basis in the Law, the contract or an express claim.
- May a deduction be made from a progress payment because of tax or social security debts?The set-off and deduction rules arising from tax and social security legislation may be applied to public payments. To whom the debt belongs, whether it has become final and the scope of the power of deduction must be checked against the current legislation.
- Which deductions may be made from a progress payment?Deductions for the contract, tax, social security, guarantees, penalties and other deductions with an express basis in the legislation may be made from a progress payment. The amount and basis of each deduction and the period to which it relates must be clearly shown in the progress payment report.
Is a deadline approaching?
You can get in touch stating the tender number, the contracting authority, the subject of the application and the deadline known to you. Sending the form does not create a lawyer–client relationship and does not create an undertaking to monitor deadlines.