When is the Final Date For Payment?

The Final Date For Payment is the last day the money can lawfully arrive, and it is fixed by the contract as a period running from the Due Date, the date the payment obligation crystallises. The Construction Act lets the parties agree almost any period, so check the payment terms first: 14, 21, 28 and 35 days are all common, and heavily amended subcontracts sometimes stretch far longer. Where the contract does not provide an adequate mechanism, the Scheme for Construction Contracts, the statutory fallback, fills the gap with a default of 17 days from the Due Date. The date matters because other rights hang off it: the Pay Less Notice deadline counts back from it, 7 days under the Scheme, and the rights that follow non-payment, suspension after notice and statutory interest, only bite once it has passed with the Notified Sum unpaid. One more trap: the Act requires the period to run from the Due Date, so a term running it from delivery of an invoice rather than from the Due Date can fall foul of the Act and let the Scheme's timetable in.

Say a bricklayer's subcontract is silent on payment periods, so the Scheme steps in. The payment period ends on the 31st and the bricklayer applied on the 28th, so the Due Date is 7 days after the period ends. The payer then has 5 days from that Due Date to serve its Payment Notice, the Final Date For Payment falls 17 days after the Due Date, and any Pay Less Notice must land at least 7 days before that final date. Miss the arithmetic by a day at the last step and the deduction fails; pass the final date unpaid and suspension and interest rights open up. The lesson is that the whole timetable hangs off one date, so fix the Due Date first and diary the rest from it.