Pay Less Notice (Construction Contract)

The Pay Less Notice (Construction Contract) is a legal template commonly used in the United Kingdom within the construction industry. This document serves as a formal notice to the contractor from the employer, highlighting the intention to pay an amount less than the sum usually invoiced for the completed work or ongoing project.

Under UK law, construction contracts often involve interim payments based on the progress of the project. These payments are typically made in stages or intervals, and the Pay Less Notice template is utilized when the employer believes there are valid grounds to pay an amount less than the sum invoiced by the contractor for a particular payment period.

The notice provides the employer with a legal framework to contest issues such as defects, non-compliance with contractual obligations, or relevant variations undertaken by the contractor. It aims to address potential disputes or disagreements over the contractor's work quality, delays, or additional costs incurred.

When using this template, the employer is required to communicate the reasons and calculations for the reduction in payment. This notice period is typically outlined in the terms and conditions of the construction contract and must be delivered within a specified timeframe before the intended payment date. The Pay Less Notice allows the employer to exercise their contractual right to set off or deduct an appropriate amount from the contractor's interim payment.

Given the complexity of construction projects and the potential disputes that may arise, the Pay Less Notice (Construction Contract) template helps establish transparency and a structured approach to managing payment issues between employers and contractors under UK law.