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Understanding the Importance of Paperwork in Construction
Don’t let paperwork derail your construction project. With recent developments in adjudication law, it's crucial for building and construction companies to ensure they are following the correct processes to avoid costly disputes. The recent judgment in Placefirst Construction v CAR Construction serves as a reminder of how critical proper documentation is during the payment process.
What Happened in Placefirst v CAR?
This case involved a contractor and subcontractor dispute over a payment application. Placefirst was ordered to pay CAR a substantial amount simply because they failed to issue a valid payless notice. The Technology & Construction Court (TCC) ruled against enforcing the adjudicator's decision, highlighting how procedural missteps can have significant consequences.
The Power of 'Smash and Grab' Adjudications
Many in the construction industry may not be aware of 'smash and grab' adjudications, which can impose automatic payment obligations if the payer does not comply with specified timelines. This can happen even if the payee's payment application requests an incorrect amount. Understanding these adjudications is vital for maintaining healthy cash flow in construction projects, especially when funds are tightly controlled.
Key Takeaways for Construction Professionals
- Always issue a payment notice that clearly states the due amount and justification for any deductions.
- Be aware of statutory requirements under the Construction Act, as failure to comply could lead to immediate payment obligations.
- Consider having legal resources available to guide your team through documentation requirements and dispute resolution processes.
As a contractor or a project manager in the construction industry, staying on top of your paperwork isn't just a good practice; it's essential to your project's success. Proper documentation can prevent disputes and ensure that all parties understand their obligations. Always consider reaching out to legal experts for precise guidance. Don’t let paperwork become your stumbling block.
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