Balfour Beatty Regional Construction Ltd v Grove Developments Ltd
This case considered the effect of a contract which included an agreed schedule of payment dates. The project overran by more than a year but the schedule ended at the original contractual completion date. This raised the question of what the contractual position was in respect of interim payments after the dates in the schedule had run out.
Balfour Beatty (the "Contractor") brought an adjudication claiming £23 million in respect of a payment application which post-dated the last date in the schedule. In response, the Employer commenced proceedings seeking declarations from the Court that there was no further right to interim payments beyond the last date in the schedule. The result was that the Contractor was required to wait until the final account for any further payment.
The High Court (and Court of Appeal) found for the Employer and found that no further payments were due to be made until the final payment under the contract.
Practical Tip:
Projects often overrun so it is in both parties' interests to agree at the outset what will happen to interim payments if the original contractual completion date is exceeded. If you don't, the Construction Act may imply something you don't intend and/or you could waste valuable time and money arguing about something which could easily have been dealt with at the outset of the job.
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.
