The Relationship between the Underlying Construction Contract and the Payment Claim Process under the Construction Contracts Act 2002

Abstract

This article argues that, subject to exceptions provided for in the Construction Contracts Act 2002, the payment claim process in general and the validity of a payment claim in particular are independent of the terms and the merits of the construction contract. The definition of “payee” in s 19, “the party to a construction contract who is entitled to a progress payment”, does not mean that a payee may serve a payment claim only if the payee is entitled to progress payments under the terms and the merits of the contract. Neither does Subpart 2 of Part 2 of the Act, which allows the parties to agree on the interval, amount and other matters of progress payments, require a payment claim to comply with the contract. The Act, however, does allow the contract to determine some CCA matters of time. There is uncertainty regarding the exact scope of this mandate, and the parties should be aware of the risk of contracting out of the Act by inserting too long or too short a time for those matters of time.