Suspension in construction
Suspension in construction

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

  • Suspension in construction
  • Suspension at common law
  • Statutory right to suspend for non-payment
  • The right to suspend under pre-1 October 2011 contracts
  • Suspension for non-payment in standard form contracts
  • Wrongful suspension
  • Power to suspend for reasons other than non-payment

This Practice Note examines statutory and contractual rights to suspend performance of obligations under a construction contract, which principally arise in the event of a failure by an employer to pay an amount due. The statutory right arises under the provisions of section 112 of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) which deal with when and how the right to suspend can be exercised. This Practice Note then considers how the standard form JCT, NEC and FIDIC contracts deal with suspension as a consequence of the HGCRA 1996 or non-payment, and also looks at wider contractual rights for a contractor to suspend performance of its obligations (ie not just because of non-payment).

Suspension can be a valuable tool for putting pressure on an employer that is not paying its bills (either at all, or on time). It can also be useful in a situation where there is no realistic prospect of obtaining further payment, for example where the employer or main contractor is insolvent or on the brink of insolvency but the contract does not provide the right to terminate for insolvency. In this case, if the statutory or contractual prerequisites are satisfied, suspending all work is an effective means of cutting costs and reducing likely losses.

Suspension at common law

There is no right at common