Construction projects involve a large sum of money, and for this reason, payment schedules are crucial. A construction contract payment schedule is a document that outlines how and when the contractor will receive payment for their work.
The Construction Contracts Act 2013 (“the Act”) is a piece of legislation that governs payment terms for construction projects in Ireland. The Act sets out specific requirements for construction contracts payment schedules, including the following:
1. Payment Due Dates
Payment is required to be made no later than 30 days from the date of receipt of a payment application. However, parties can agree on a payment application date that is later than the work done.
2. Payment Applications
A payment application is a request for payment by the contractor or subcontractor. It must be made in writing and delivered to the employer. The payment application must specify the amount of payment requested and the period to which it relates.
3. Payment Notification
If the employer intends to pay less than the amount requested in the payment application, they must notify the contractor or subcontractor of this within 21 days of receiving the payment application. This notification must be made in writing and specify the amount being paid and the reason for the lesser payment.
4. Dispute Resolution
If there is a dispute between the parties regarding payment, the Act provides for a process of adjudication to resolve the dispute.
Construction contracts payment schedules in Ireland must comply with the Construction Contracts Act 2013. Failure to comply with the Act can result in penalties, including the withholding of payment, interest payments, and potential legal action.
In conclusion, the Construction Contracts Act 2013 regulates payment terms for construction projects in Ireland. A payment schedule is a crucial component of any construction contract, and it is essential to ensure that it is in compliance with the Act. By doing so, contractors can ensure timely payments and prevent any potential legal issues.