Construction Lawyer & Building Solicitors Sydney | Contracts Specialist Law Firm

Suspending a Construction Contract

Still unpaid after attempts of claiming payment for your hard work? Suspend your work and consult a construction lawyer for your next legal steps.

First consultation is FREE.

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What is Contract Suspension?

Contract Suspension happens when a contractor decides to temporarily hold off his construction work. This means suspending construction work for various reasons, especially in the case of payment issues with a builder. It is one of the rights a contractor can enforce through the Security of Payment Act.

This happens when the payment claim and payment schedule have been done but the builder hasn’t paid the contractor yet. Since it could cause their cash flow to be unstable, suspending work will be a good action to remind their builders in paying them.

Grounds for Contract Suspension

According to Section 27 of the law, a contractor can suspend their work when the builder hasn’t paid the claim. They have two business days after the reference date has passed to start suspending construction work.

But, the contractor is not responsible for:

  1. Losses and expenses caused by the suspension of work and;
  2. Paying out the expenses incurred with the suspension of work.

Instead, the builder is responsible to pay the contractor for the expenses and losses that may happen during the suspension. This serves a a consequence for a builder to urge him to pay his contractors on time.

Notice of Suspension of Work

Before actually suspending work, you have to inform the builder and their client that you are planning to stop working until things sort out. Do this by writing a notice that you intend to suspend work.

Doing this formally inform them that since you are not paid on schedule, you need to stop your work. This also applies with suppliers when delivering  goods to the construction site.

But, make sure to follow clauses in your contract relating to suspending work. A contract suspension is only temporary and would still require you to talk to your builder about your payment dispute. You might need further legal action too if the problem escalates.

If the builder pays during the suspension, then you can resume work after three business days. Else, you have to enforce your right further through adjudication or worse, a tribunal.

Why suspend a Construction Contract?

You will need to suspend your contract if your builder is trying to rip you off for your hard work. Since you would need pay up employees and buy materials to carry out work, you would want a steady cash flow for it.

Hence, you would need to remind them suspending work is the consequence of their late payment. Other consquences include:

  • The builder would be required to immediately pay the entire claimed amount as debt;
  • The builder would be going through adjudication and pay the adjudicated amount and;
  • A possible interest rate specified by the adjudicator when the builder still refuses to pay the claim.

You need to stand firm on your right to get paid. Your rights to suspend work are protected by Security of Payment, you just need to enforce it.

Building Disputes Solicitor Sydney - John Dela Cruz Photo | Contracts Specialist

Person Who Can Help You Suspend your Contract

If you want to fully enforce your right to Security of Payment, you will need John Dela Cruz. With his 10+ years of experience in construction law, you are sure to be given expert legal advice.

He can help you on understanding and enforcing your right to Security of Payment. He can help you in giving advice when you should suspend your contract, or when to file for adjudication. He can also assist you on the legal processes to get you hard-earned money.

Enforce your rights and book a consultation now.

The first one is FREE.

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