Local Democracy, Economic Decelopment And Construction Act 2009

Question 1

What is the Local Democracy, Economic Development and Construction Act 2009?

Answer 1

• Came into force in 2011, the Act amended the HGCRA 1996.
• The Act changed the way contracts were entered into and introduced an amended regime for payment and adjudication.

Question 2

What are the key provisions under the LDEDC Act 2009

Answer 2

Contracts
- LDEDC Act repeals requirement for contracts to be in writing.

Payment
- Provide for ‘adequate mechanism’ for determining what payments are due and when they become payable.

Payment Notices
- Contract must specify who issues the payment notice.
- Must be issued no later than 5 days after the payment due date and paid before the final date for payment.
- Must specify sum to be due at the payment due date and the basis on which it is calculated.

Pay Less Notice
- Paying parties must pay notified sum in payment notice by the final date for payment or serve an effective pay less notice.

Suspension of Performance
- Act clarifies the right to suspend carrying out the work in the event of non-payment.

Question 3

Under LDEDC Act, what happens if the payer fails to serve a payment notice in the required form, or in the set timeframe?

Answer 3

• The payee is entitled to issue a default payment notice.
• A default payment notice obliges the payer to pay the amount due and allows the payee their statutory right to suspend performance for non-payment.

Question 4

Under LDEDC Act, what must a pay less notice specify to be effective?

Answer 4

• The sum that the paying party considers to be due on the date the notice is served.
• The basis on which the sum is calculated.

Question 5

Under LDEDC Act, what must happen in order for a contractor to suspend performance of its obligations by reason of non payment?

Answer 5

• A default notice must be issued and there must have been failure to pay.