Delay of payments release

Hi Ayman

If there is no clauses in the contract regarding delayed payments then the law of your country will probably apply.

Get some legal advice.

Best regards

Mike Testro

Hi,

in any contract i’m sure that there is a specific duration to the engineer and to the employer to release the monthly payment of the contractor,

normally the contract is giving the engineer 28 days to check and certify the contractor’s payment and another 28 days to the empolyer to check and cerify the payment to the contractor’s account.

if the engineeror the empoloyer faild to release the paymrnt within the stabulated time then the contractor can submit his claim for additional cost due to finanicial loss and if this case repeated and causing a sever dagages to the contractor cash flow he can notify the enginerr and the employer in Writting with a formal letter to the Engineer - copied to the Employer - stating that they have failed to administer the contract properly and therefore placing the Employer in breach of conttract and you can ask to terminate the contract and get all your entitelements.

Dear Ashraf,

We need to clarify at what stage of the Contract we are and how much percentage of the Contract is already paid. Maybe the Engineer and Owner have reasons to hold the payments.

Best,

Samer

Hi,

I think no EOT entitlement.

Maybe you can reason breach of contract, hence, termination of contract due to delayed payment.

In the event that settlement can be reach, you have to negotiate for the employer to pay the cost of interest, if such interest is really inccured by the contractor.

This can be done by showing records from the bank, that indeed contractor inccured additional interst due to delayed payment by the employer. Otherwise, how can you claim for interest incurred if there is no such records.

Regards,
Charlie

Dear Charleston,

Usually, the financing interest rate is mentioned in the Contract so is the duration of payment of each invoice. The rest is math.

Best,

Samer

All

Late payment is not something you can terminate a contract for unless the contract expressly says so, in fact it is not even usually considered a breach of contract at all.

An intention NOT TO PAY AT ALL is a breach of contract that you can normally terminate for, being late is merely being late.

Normally the contractor’s compensation will be interest on the outstanding money but no EoT.

Dear Ayman,

Usually when the Owner is holding payment, the Contractor starts delaying the works. Per FIDIC this is allowed as per clause 16/1. You must start issuing notifications to the Owner regarding the amount of time they delayed your payments.

Eventually, you are allowed to stop work, terminate the Contract and charge them finance charges automatically without notice. If your situation is really bad, this is the best course of action.

Best,

Samer

FIDIC does have its own way of dealing with the problem, it’s the only standard form contract that I know that allows the contractor to slow progress, etc.

So if it’s not FIDIC, as per my previous post.

Unless you’re in the UK and have the HGCR Act to fall back on)