No pay? Walking off site?

Strange as it may seem, the fact that you have not been paid does not mean that you are automatically entitled to stop working. 

If an unpaid party to a contract simply leaves site they could be facing serious consequences.  They will be in breach of contract and the paying party could sue for damages caused by that breach.  This could include costs incurred due to delay on completion of the project as well as the extra costs of completing the works.  In turn, this can mean that not only is the unpaid party not paid for the works it has carried out but then it has to pay for the losses it has caused by walking off site.

It is possible to avoid this situation.  In construction contracts there is a statutory right to be able to suspend performance of obligations under the contract if you have not been paid.  However, this right cannot be exercised without first giving notice of intention to suspend performance.  Such notice must be in writing and includes emails; it must also give at least 7 days’ notice of the intention to suspend.  Those 7 days do not include Bank Holidays.

The right to give notice and to suspend the works arises only in relation to non-payment of monies due, it does not relate to any other breach of contract.  Furthermore, the final date for payment must have passed and the paying party must not have served a valid Pay Less Notice indicating that it was going to pay less than the amount that was due.  Contractors and subcontractors who have not been paid must follow this procedure of serving the correct notice.  If they do not, the consequences could be devastating for them. 

Unfortunately, in the heat of the moment people do walk off-site.  Our advice however, is to avoid this at all costs and follow the proper process.

Peter Allen
01245 453813
[email protected]