Construction Contracts Act 2002

13 Conditional payment provisions ineffective

• (1) A conditional payment provision of a construction contract has no legal effect and accordingly—

  • (a) is not enforceable in any civil proceedings; and

  • (b) may not be used as a basis for withholding progress payments that are due and payable under the contract.

  (2) In this section,—

  amount owed, in relation to a construction contract, means either the whole or part of any amount of money owing for construction work that has already been carried out under the contract

  conditional payment provision of a construction contract means a provision of the contract—

  • (a) that makes the obligation of one party (party A) to pay an amount owed to another party (party B) conditional on party A receiving payment from a further party (party C); or

  • (b) that makes the due date for payment of an amount owed by party A to party B contingent on the date on which party A receives payment from party C; or

  • (c) that is commonly referred to in the construction industry as a “pay when paid” or “pay if paid” clause of a construction contract; or

  • (d) that is of a prescribed kind (if any).