(1)A party to a construction contract may not withhold payment after the final date for payment of a sum due under the contract unless he has given an effective notice of intention to withhold payment.
The notice mentioned in section 110(2) may suffice as a notice of intention to withhold payment if it complies with the requirements of this section.
(2)To be effective such a notice must specify—
(a)the amount proposed to be withheld and the ground for withholding payment, or
(b)if there is more than one ground, each ground and the amount attributable to it,
and must be given not later than the prescribed period before the final date for payment.
(3)The parties are free to agree what that prescribed period is to be.
In the absence of such agreement, the period shall be that provided by the Scheme for Construction Contracts.
(4)Where an effective notice of intention to withhold payment is given, but on the matter being referred to adjudication it is decided that the whole or part of the amount should be paid, the decision shall be construed as requiring payment not later than—
(a)seven days from the date of the decision, or
(b)the date which apart from the notice would have been the final date for payment,
whichever is the later.
Commencement Information
I1S. 111 wholly in force; s. 111 not in force at Royal Assent see s. 150; s. 111 in force at 1.5.1998 by (E.W.) S.I. 1998/650, art. 2 and (S.) S.I. 1998/894, art. 2