Construction Industry Sub-Contracts - Payment in Invoiced Instalments
The template sub-contracts in this subfolder are suitable for all kinds of small scale construction projects. They can be used by a builder or main contractor to engage any type of sub-contractor, such as an electrician, plumber, plasterer or bricklayer.
These sub-contracts provide for a payment to be made in instalments on receipt of an invoice from the sub-contractor. Some of the templates make provision for retention to be held by the contractor. The retained sum is paid to the sub-contractor when the defects liability period has expired, so long as the sub-contractor has remedied any defects.
All of the templates include detailed provisions to ensure the parties understand what is expected of them, thus reducing the scope for disputes. Descriptions of the main contract works and the sub-contract works need to be inserted. A timescale is set out for completion of the works and the agreement lists the day-to-day obligations of the contractor and sub-contractor. The sub-contracts have clauses dealing with payments to the sub-contractor, the sub-contractor’s liability and insurance.
In other subfolders we have construction sub-contracts providing for payment in instalments initiated by the contractor serving a payment notice, templates providing for one-off payment on practical completion of the works and more robust templates for larger projects.
Construction Industry Sub-Contracts - Payment in Invoiced Instalments is part of Business . Just £38.50 + VAT provides unlimited downloads from Business for 1 year.
Frequently Asked Questions
My subcontractor will invoice me in stages, is there a template for instalment payments on invoice? +
Yes. These subcontracts provide for payment in instalments on receipt of an invoice from the subcontractor, for any small scale construction project and any trade. They set out the works, a completion timescale, the parties' day to day obligations and clauses on payment, the subcontractor's liability and insurance. Use one where the subcontractor bills you as the work progresses rather than taking a single payment at the end.
How does invoice-based instalment payment fit the statutory pay less notice rules? +
Each instalment runs through the payment regime of the Housing Grants, Construction and Regeneration Act 1996. When the subcontractor invoices, a sum becomes due with a final date for payment, and if you want to pay less you must serve a pay less notice in time setting out the basis. Miss it and you generally owe the notified sum, and the subcontractor can suspend for non-payment on notice. These templates build in that cycle so each instalment is handled correctly.
What is the difference between paying on the subcontractor's invoice and paying on a contractor's payment notice? +
It is about who starts the payment cycle. In this instalment version the subcontractor triggers payment by sending an invoice. In the payment on notice version, the contractor initiates it by serving a payment notice on the subcontractor. Both comply with the Construction Act payment rules, but they suit different working styles: use invoice based where the subcontractor bills you, and notice based where you prefer to control and certify each payment. Pick the process that matches how you actually run payments.
Can I hold retention on an instalment subcontract? +
Yes. Some of these instalment templates provide for retention: you pay the instalments but hold back a retained sum, released after the defects liability period ends and any defects are put right. That keeps some security in your hands until you are satisfied the work is sound. Retention percentages and the defects period are for you to set in the subcontract, since they are contractual, not statutory. Agree them at the outset and record them clearly.
