In force2020 Revised Edition

Contents

Building and Construction Industry Security of Payment Act 2004 · 2020 Revised Edition · Part 2 · Rights to Progress Payments

9. Effect of “pay when paid provisions”

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(1)

A pay when paid provision of a contract is unenforceable and has no effect in relation to any payment for construction work carried out or undertaken to be carried out, or for goods or services supplied or undertaken to be supplied, under the contract.

(2)

In this section —

“money owing”, in relation to a contract, means money owing for construction work carried out, or for goods or services supplied, under the contract;

“pay when paid provision”, in relation to a contract, means a provision of the contract by whatever name called —

(a)

that makes the liability of one party (called in this definition the first party) to pay money owing to another party (called in this definition the second party) contingent or conditional on payment to the first party by a further party (called in this definition the third party) of the whole or any part of that money;

(b)

that makes the due date for payment of money owing by the first party to the second party contingent or conditional on the date on which payment of the whole or any part of that money is made to the first party by the third party;

(c)

that otherwise makes the liability to pay money owing, or the due date for payment of money owing, contingent or conditional on the operation of any other contract or agreement; or

(d)

that is of such kind as may be prescribed.

Terms defined in this Act

construction work
Defined · s 3
“construction work” means —(a)the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of buildings or structures (whether permanent or not) that form, or are to form, part of the land;(b)the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of any works that form, or are to form, part of the land, including walls, roadworks, powerlines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for the purpose of land drainage, coast protection or defence;(c)the installation in any building, structure or works of fittings that form, or are to form, part of the land, including systems of heating, lighting, air conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection, and security or communications systems;(d)any operation which forms an integral part of, is preparatory to, or is for rendering complete, works of the kind mentioned in paragraph (a), (b) or (c), including —(i)land reclamation;(ii)site clearance, earth moving, excavation, tunnelling and boring;(iii)the laying of foundations;(iv)the erection, maintenance or dismantling of scaffolding;(v)the prefabrication of components to form part of any building, structure or works, whether carried out at or on the construction site or elsewhere; and(vi)site restoration, landscaping and the provision of roadways and other access works;(e)the external or internal cleaning of buildings, structures or works, so far as it is carried out in the course of their construction, alteration, repair, restoration, maintenance or extension; or(f)the painting or decorating of the external or internal surfaces of any building, structure or works;
Open s 3
contract
Defined · s 2
“contract” means a construction contract or a supply contract, and includes a construction contract or a supply contract that has been terminated;
Open s 2
due date
Defined · s 2
“due date”, in relation to a progress payment, means the date on which the progress payment becomes due and payable under section 8;
Open s 2
goods
Defined · s 3
“goods” means —(a)materials or components to form part of any building, structure or works arising from construction work; or(b)plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of construction work;
Open s 3
services
Defined · s 3
“services” means —(a)the conduct of feasibility studies, planning services, the submission of applications or other documents to any relevant authority, site supervision services, professional engineering services, or architectural, design, surveying or quantity surveying services, in relation to construction work;(b)project management services in relation to construction work;(c)building, engineering, exterior or interior decoration or landscape advisory services in relation to construction work; or(d)the provision of labour to carry out construction work.
Open s 3