We have had our contract terminated and the client is withholding previous payments that we are still waiting for. Is this legally correct.
He stipulates that now the contract is terminated he doesn’t have to pay any previous amounts until the termination deadline of 13 weeks.
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If amounts were certified prior to the Project Manager issuing a termination certificate then the provisions of the ‘Construction Act’ would still apply and payment would have to be made by the final due date, unless a formal notice was issued within the appropriate timescales.
The assessment by the PM after 13 weeks relates to the amount due on termination.
As a matter of interest (no pun intended) have a look at the Late Payment of Commercial Debt Regulations 2013 and calculate how much compensation you should be entitled to for late payment.
Most NEC contracts have clauses dealing with such a situation (late payment) but, from my previous research into this matter, it is more than likely that they are not actually compliant with the requirements of the Regulations, especially the amount of interest stated.
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In a similar situation where the Client has terminated the Contractors contract but prior to termination has not issued a certificate in accordance with the payment regime. Is the payment still due with the applied amount now being the notified sum?
Is there any case law on this?
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