Payment in construction contracts under the HGCRA 1996
Payment in construction contracts under the HGCRA 1996

The following Construction guidance note provides comprehensive and up to date legal information covering:

  • Payment in construction contracts under the HGCRA 1996
  • Background to HGCRA 1996
  • The payment provisions of HGCRA 1996
  • Adequate payment mechanism (s 110)
  • Payment notices (s 110A)
  • 'Default' payment notices (s 110B)
  • Pay less notices (s 111)
  • Proceedings to determine the value of the works
  • Insolvency
  • Suspension of performance for non-payment (s 112)
  • more

Produced in association with 4 Pump Court

This Practice Note considers the provisions of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) concerning payment in construction contracts. Among other things, it looks at the background to HGCRA 1996, the amendments made to it by the Local Democracy, Economic Development and Construction Act 2009 (LDEDCA 2009), the requirement for an adequate payment mechanism in construction contracts, the nature of payment notices and pay less notices, and what happens where a paying party fails to give the required notices.

See also Practice Notes: Summary of payment provisions in the HGCRA 1996 and Interim payments in construction contracts. For a list of key cases, see Practice Note: HGCRA 1996 payment provisions—key cases.

HGCRA 1996 as amended by the LDEDCA 2009 applies to construction contracts entered into on or after 1 October 2011. Unless indicated otherwise, this Practice Note considers the law applicable to these contracts.

In respect of contracts entered into before this date, HGCRA 1996 as originally enacted applies (even if the dispute arises after 1 October 2011). For guidance on the old law, see ‘Pre-LDEDCA 2009 position’ below. A copy of Part II of HGCRA 1996 as originally enacted is available here.

The Scheme for Construction Contracts, which applies as explained below in Adequate payment mechanism (s 110), was also amended from 1 October 2011. Unless