The provisions of the the Construction Contracts Bill, 2010 are
intended to address some very difficult issues surrounding the
operation of construction contracts and payment practices within
the industry.
The Bill seeks to achieve improvements by providing for a range of
statutory rights for both contractors and subcontractors, bolstered
by a fast-track dispute resolution procedure.
The Bill applies to construction contracts, whether oral or in
writing, including agreements to carry out construction operations.
However, the Bill, which is aimed at improving practises between
commercial entities, does not apply to contracts with residential
occupiers.
Some important provisions of the Bill include:-
1. Provision for notice of intention to withhold payment.
It requires the payer to give prior and reasoned notice to the
payee of an intention to withhold payment of monies
due.
2. Provision for the statutory right to adjudication.
Adjudication is a quick and simple mechanism to decide the amount
of money to be paid. The parties can agree to accept the decision
as final or decide to refer to conciliation, arbitration or
litigation as per the provisions of the contract.
3. Provision for the right to suspend work on 7 days notice,
for non-payment.
The Bill contains very similar provisions to the UK's Housing Grants, Construction & Regeneration Act, 1996, which dramatically improved cash flow in the construction sector in the UK and it is hoped that the Bill will have the same effect in Ireland, improving cash flow by creating clarity and transparency in the payment of sums due under construction contracts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.