Harnessing the Power of Payless Notices

Payless Notices (PLN’s), whilst useful, can cause frustration, stress, impact timelines through the suspension of work and create cash flow issues for the parties involved. This is when getting the right legal dispute support or advice is important.

1. Understanding Payless Notices

What is a Payless Notice? In essence, it's a written notice issued by the payer (usually the employer) to the payee (usually the contractor/sub-contractor), indicating their intention to pay less than the amount originally agreed upon in the contract. In the United Kingdom, the concept of the Payless Notice is enshrined in the Housing Grants, Construction and Regeneration Act 1996.

2. The Importance of Payless Notices

Why are Payless Notices so important? Simply put, they protect both parties. They ensure that the payer is not overcharged for work that has not been completed or is not up to standard. At the same time, they ensure that the payee is aware of any changes to their payment, giving them a chance to dispute the claim or adjust their work accordingly.

3. Adding a Payless Notice Clause

Adding a Payless Notice clause to your contract isn't just a good idea – it's a necessity. But how do you do it? Firstly, you need to clearly define the timing of the notice. When should it be delivered? Secondly, you need to outline the content of the notice. What information should it contain? Lastly, you need to specify the delivery method. How should it be sent?

4. Implementing and Enforcing Payless Notices

Once your Payless Notice clause is in place, you need to ensure it's properly implemented and enforced. This means keeping meticulous records, communicating openly and honestly with all parties, and taking swift action if the terms of the notice are not met.

5. The Impact of Non-Compliance

But what happens if a Payless Notice is not delivered as required? The consequences can be significant. The payer could be liable for the full amount claimed by the payee, regardless of whether the work has been completed to the agreed standard. To avoid this, it's crucial to adhere to the terms of your Payless Notice clause and to seek legal advice if any disputes arise.

6. Navigating Payless Notice Scenarios

Let's imagine a scenario. The contractor has fallen behind schedule and the quality of their work has suffered. The employer decides to issue a Payless Notice, reducing the contractor's payment until the issues are resolved. This is a classic example of a Payless Notice in action. It's a clear, fair, and effective way to address issues and keep the project on track.

Do you need advice on the issuing or resolving a Payless Notice? Are you facing adjudication?

Contact Haywood Commercial today.