|
|
| Construction Payments to be Made More Secure |
| Under the Building and Construction Industry Security of Payment Act 1999(NSW) all contracts, written or oral, for carrying out construction work in New South Wales are under tighter regulation. |
The Act applies to contracts for construction work itself as well as contracts for the supply of related goods and services. |
The regulatory regime improves the cash flow situation of building contracts in the following ways:
- "Pay when paid” clauses are ineffective.
- Progressive payments are mandatory, despite the parties' agreement.
- Progress claims are assessed promptly.
- There is a legal right to recover unpaid progress payments.
- Disputed claims are to be resolved by a statutory adjudication process.
- The outcome of the statutory adjudication process is secure.
- Contractors affected by a payment dispute are given a limited right of suspension with immunity.
|
| Some contracts are excluded from the operation of the legislation. These include residential building contracts and certain financial and insurance arrangements. But parties to contracts that do come within the legislation cannot agree to exclude, modify or restrict its operation. |
