What are the legal remedies available to contractors and consultants to enforce payment?

Abstract

Smooth cash flow ensures the effective delivery of projects and is fundamental to develop and sustain a healthy, professional and competitive construction industry. The adverse effect of late or non-payment of contractors and consultants are well known to all in the construction industry. Late and non-payment problems have forced countries like the United Kingdom (UK), Singapore, New Zealand and Australia to introduce legislation to regulate the payment of contractors and consultants in terms of a building or a construction contract. From South African specific surveys conducted by the Construction Industry Development Board (CIDB) and Consulting Engineers South Africa (CESA) it appears that local building and construction contractors and consultants have the same problems as their international counterparts (if not more so) when it comes to payment of work completed or services rendered. In light of the above this article investigates the legal remedies available to enforce right of payment for work completed or services performed, to determine the effectiveness of the said remedies, and to suggest what possible solutions there are in order to improve payment practices in the South African building and construction industry.

Keywords

• construction contracts
• construction industry
• cash flow
• non-payment
• payment act