321. Insolvency.

The insolvency of individual1 or corporate2 employers, contractors or professionals involved in a construction project is governed by the Insolvency Act 1986. Determination3 or forfeiture4, vesting and direct payment clauses5 in building contracts give rise to particular insolvency considerations.

Most building contracts purport to give the employer, or in the case of a main contract, the sub-contractor, certain rights to determine the employment of the contractor or to determine (or formerly to forfeit) the contract in the event of the insolvency of the main contractor6. These provisions are enforceable against the trustee in bankruptcy or liquidator if the contract is