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Local Democracy, Economic Development and Construction Bill [HL]


Local Democracy, Economic Development and Construction Bill [HL]
Part 8 — Construction contracts

84

 

(b)   

notice is not given as so required.

(2)   

Subject to subsection (4), the payee may give to the payer a notice

complying with section 110A(3) at any time after the date on which the

notice referred to in subsection (1)(a) was required by the contract to be

given.

5

(3)   

Where pursuant to subsection (2) the payee gives a notice complying

with section 110A(3), the final date for payment of the sum specified in

the notice shall for all purposes be regarded as postponed by the same

number of days as the number of days after the date referred to in

subsection (2) that the notice was given.

10

(4)   

If—

(a)   

the contract permits or requires the payee, before the date on

which the notice referred to in subsection (1)(a) is required by

the contract to be given, to notify the payer or a specified person

of—

15

(i)   

the sum that the payee considers will become due on the

payment due date in respect of the payment, and

(ii)   

the basis on which that sum is calculated, and

(b)   

the payee gives such notification in accordance with the

contract,

20

   

that notification is to be regarded as a notice complying with section

110A(3) given pursuant to subsection (2) (and the payee may not give

another such notice pursuant to that subsection).”

140     

Requirement to pay notified sum

(1)   

In the Housing Grants, Construction and Regeneration Act 1996 (c. 53), for

25

section 111 (notice of intention to withhold payment) substitute—

“111    

Requirement to pay notified sum

(1)   

Subject as follows, where a payment is provided for by a construction

contract, the payer must pay the notified sum (to the extent not already

paid) on or before the final date for payment.

30

(2)   

For the purposes of this section, the “notified sum” in relation to any

payment provided for by a construction contract means—

(a)   

in a case where a notice complying with section 110A(2) has

been given pursuant to and in accordance with a requirement of

the contract, the amount specified in that notice;

35

(b)   

in a case where a notice complying with section 110A(3) has

been given pursuant to and in accordance with a requirement of

the contract, the amount specified in that notice;

(c)   

in a case where a notice complying with section 110A(3) has

been given pursuant to and in accordance with section 110B(2),

40

the amount specified in that notice.

(3)   

The payer or a specified person may in accordance with this section

give to the payee a notice of the payer’s intention to pay less than the

notified sum.

(4)   

A notice under subsection (3) must specify—

45

 
 

Local Democracy, Economic Development and Construction Bill [HL]
Part 8 — Construction contracts

85

 

(a)   

the sum that the payer considers to be due on the date the notice

is served, and

(b)   

the basis on which that sum is calculated.

   

It is immaterial for the purposes of this subsection that the sum referred

to in paragraph (a) or (b) may be zero.

5

(5)   

A notice under subsection (3)—

(a)   

must be given not later than the prescribed period before the

final date for payment, and

(b)   

in a case referred to in subsection (2)(b) or (c), may not be given

before the notice by reference to which the notified sum is

10

determined.

(6)   

Where a notice is given under subsection (3), subsection (1) applies only

in respect of the sum specified pursuant to subsection (4)(a).

(7)   

In subsection (5), “prescribed period” means—

(a)   

such period as the parties may agree, or

15

(b)   

in the absence of such agreement, the period provided by the

Scheme for Construction Contracts.

(8)   

Subsection (9) applies where in respect of a payment—

(a)   

a notice complying with section 110A(2) has been given

pursuant to and in accordance with a requirement of the

20

contract (and no notice under subsection (3) is given), or

(b)   

a notice under subsection (3) is given in accordance with this

section,

   

but on the matter being referred to adjudication the adjudicator decides

that more than the sum specified in the notice should be paid.

25

(9)   

In a case where this subsection applies, the decision of the adjudicator

referred to in subsection (8) shall be construed as requiring payment of

the additional amount not later than—

(a)   

seven days from the date of the decision, or

(b)   

the date which apart from the notice would have been the final

30

date for payment,

   

whichever is the later.

(10)   

Subsection (1) does not apply in relation to a payment provided for by

a construction contract where—

(a)   

the contract provides that, if the payee becomes insolvent the

35

payer need not pay any sum due in respect of the payment, and

(b)   

the payee has become insolvent after the prescribed period

referred to in subsection (5)(a).

(11)   

Subsections (2) to (5) of section 113 apply for the purposes of subsection

(10) of this section as they apply for the purposes of that section.”

40

(2)   

In section 112 of that Act (right to suspend performance for non-payment)—

(a)   

in subsection (1), for the words from “Where” to “given” substitute

“Where the requirement in section 111(1) applies in relation to any sum

but is not complied with,”;

(b)   

in subsection (3), for “the amount due” substitute “the sum referred to

45

in subsection (1)”.

 
 

Local Democracy, Economic Development and Construction Bill [HL]
Part 9 — Final

86

 

141     

Suspension of performance for non-payment

(1)   

In the Housing Grants, Construction and Regeneration Act 1996 (c. 53), section

112 (right to suspend performance for non-payment) is amended as follows.

(2)   

In subsection (1), after “performance of” insert “any or all of”.

(3)   

After subsection (3) insert—

5

“(3A)   

Where the right conferred by this section is exercised, the party in

default shall be liable to pay to the party exercising the right a

reasonable amount in respect of costs and expenses reasonably

incurred by that party as a result of the exercise of the right.”

(4)   

In subsection (4), after “pursuance of” insert “, or in consequence of the exercise

10

of,”.

Part 9

Final

142     

Repeals

(1)   

Schedule 7 contains repeals.

15

(2)   

The repeal by this Act of sections 17, 19 and 26 of the Local Government Act

1992 (c. 19) does not affect the continuing effect of orders and regulations made

under those sections.

(3)   

For the purposes of this Act—

(a)   

the repeals in Part 1 of Schedule 7 are part of Chapter 6 of Part 1

20

(membership of local authorities);

(b)   

the repeal in Part 2 of Schedule 7 is part of Chapter 2 of Part 2 (audit of

entities connected with local authorities);

(c)   

the repeals in Part 3 of Schedule 7 are part of Part 3 (local government

boundary and electoral change);

25

(d)   

the repeals in Part 4 of Schedule 7 are part of Part 5 (regional strategy);

(e)   

the repeals in Part 5 of Schedule 7 are part of Part 8 (construction

contracts).

143     

Extent

(1)   

Parts 1 to 7 extend to England and Wales only, except that—

30

(a)   

an amendment or repeal effected by any of those Parts has the same

extent as the provision amended or repealed, and

(b)   

sections 64(2) to (6), 82(2) to (6), 111, 113 and 114 (powers to make

consequential provision etc) extend also to Scotland and Northern

Ireland.

35

Paragraph (a) does not apply to Chapter 6 of Part 1 (which accordingly extends

to England and Wales only).

(2)   

Part 8 extends to England and Wales and Scotland.

(3)   

This Part extends to England and Wales, Scotland and Northern Ireland.

 
 

Local Democracy, Economic Development and Construction Bill [HL]
Part 9 — Final

87

 

144     

Commencement: general

(1)   

In Part 1 (democracy and involvement)—

(a)   

Chapters 1 and 2 come into force—

(i)   

in relation to England, on a day appointed by the Secretary of

State;

5

(ii)   

in relation to Wales, on a day appointed by the Welsh Ministers;

(b)   

Chapter 3 comes into force on a day appointed by the Secretary of State;

(c)   

Chapter 4 comes into force on the day on which this Act is passed;

(d)   

Chapters 5 and 6 come into force at the end of the period of two months

beginning with the day on which this Act is passed.

10

(2)   

In Part 2 (local authorities: governance and audit)—

(a)   

in Chapter 1—

(i)   

section 30 comes into force on a day appointed by the Secretary

of State;

(ii)   

sections 31 and 32 come into force at the end of the period of two

15

months beginning with the day on which this Act is passed;

(b)   

Chapter 2 comes into force—

(i)   

in relation to England, on a day appointed by the Secretary of

State;

(ii)   

in relation to Wales, on a day appointed by the Welsh Ministers.

20

(3)   

In Part 3 (local government boundary and electoral change)—

(a)   

sections 59, 61 and 65 and Schedule 3 come into force on the day on

which this Act is passed;

(b)   

the remaining provisions come into force on a day appointed by the

Secretary of State.

25

(4)   

Part 4 (local authority economic assessment) comes into force on a day

appointed by the Secretary of State.

(5)   

Part 5 (regional strategy) comes into force on a day appointed by the Secretary

of State.

(6)   

Part 6 (economic prosperity boards and combined authorities) comes into force

30

on a day appointed by the Secretary of State.

(7)   

Part 7 (multi-area agreements) comes into force at the end of the period of two

months beginning with the day on which this Act is passed.

(8)   

Part 8 (construction contracts) comes into force as specified in section 145.

(9)   

This Part comes into force on the day on which this Act is passed.

35

(10)   

Any power to appoint a day under this section—

(a)   

includes power to appoint different days for different purposes;

(b)   

includes power to make transitional provision or savings;

(c)   

is to be exercised by order made by statutory instrument.

145     

Commencement: construction contracts

40

(1)   

Part 8 comes into force, so far as extending to England and Wales—

 
 

Local Democracy, Economic Development and Construction Bill [HL]
Part 9 — Final

88

 

(a)   

on a day appointed by the Welsh Ministers, in relation to construction

contracts which relate to the carrying out of construction operations in

Wales;

(b)   

on a day appointed by the Secretary of State, in relation to other

construction contracts.

5

(2)   

Part 8 comes into force, so far as extending to Scotland, on a day appointed by

the Scottish Ministers.

(3)   

The amendments made by Part 8, so far as extending to England and Wales, do

not apply—

(a)   

in relation to construction contracts which relate to the carrying out of

10

construction operations in Wales and are entered into before the day

appointed under subsection (1)(a), or

(b)   

in relation to other construction contracts which are entered into before

the day appointed under subsection (1)(b).

(4)   

The amendments made by Part 8, so far as extending to Scotland, do not apply

15

in relation to construction contracts which are entered into before the day

appointed under subsection (2).

(5)   

In this section “construction contracts” and “construction operations” have the

same meanings as in Part 2 of the Housing Grants, Construction and

Regeneration Act 1996 (c. 53).

20

(6)   

Any power to appoint a day under this section—

(a)   

includes power to appoint different days for different purposes;

(b)   

includes power to make transitional provision or savings;

(c)   

is to be exercised by order made by statutory instrument.

146     

Short title

25

(1)   

This Act may be cited as the Local Democracy, Economic Development and

Construction Act 2009.

(2)   

Nothing in this Act shall impose any charge on the people or on public

funds, or vary the amount or incidence of or otherwise alter any such charge

in any manner, or affect the assessment, levying, administration or

30

application of any money raised by any such charge.

 
 

 
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