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09Aug91 UK: SECURE YOUR JUST DESSERTS - ADVICE FOR CONTRACTORS ON HOW TO ENSURE PROMPT PAYMENT. (1 OF 3)

In these difficult times contractors must ensure that payment arrives on time for the work that they do. Solicitor Michael Tiplady explains how to get your money.Dispute over payment is the scourge of the British construction industry. The Confederation of Construction Specialists estimates that contractors lose £1,000 million every year due to payment-related disputes.Although the European Commission is putting forward proposals to deal with the problem, the contractor will continue to suffer. However, the wise contractor will take precautions to make sure payment arrives.The various methods of increasing the chances of being paid can be split into four stages - pre-contract, contract, post contract and dispute.Pre-contractThe biggest cause of contractual disputes is contractors not reading contract documents. They may spend hours dealing with the technical aspects of a contract, but barely look at details of the terms and conditions.By reading carefully all tender documents, particularly any amendments, many problems can be headed off early.Points to check are the terms of payment, access to the site and any onerous conditions imposed. In non-standard forms, the liquidated and ascertained changes and retention clauses can be problematical, as can the assignment of contract and determination clauses.The plethora of site surveys, soil reports and drawings attached to contracts should also draw the undivided attention of the conscientious contractor - these should be checked for accuracy.Most importantly at this stage of a scheme, the contractor should be satisfied that the employer has the ability to pay. In many cases this may seem unnecessary, but checks through a credit agency or a company search could be invaluable, especially if dealing with an unfamiliar employer.These checks are relatively cheap, and well worth the effort. If a third party is financing the scheme a letter from that party would be useful.