Amendments to IChemE Form of Contract for Minor Works

Contracts (The Orange Book) Second Edition 2003, including all

reprints.

The following amendments to the General Conditions of Contract are

necessary to accommodate the changes to the Housing Grants, Construction
and Regeneration Act 1996 as set out in Part 8 of the Local Democracy,
Economic Development and Construction Act 2009. Those changes are due to
come into effect on 1st October 2011 and will apply to all construction
contracts made after that date.

Those who are planning to enter into a contract on or after 1st October 2011
based on the IChemE Orange Book 2nd Edition should ensure that the
following amendments are incorporated in the contract.

1. Definitions and interpretation

1.1 Add the following:

‘Final Date for Payment’ has the meaning set out in Sub-clause 18.5.

18. Interim and final payments

Replace the whole of Clause 18 with the following:

18.1 The Purchaser shall pay the Contractor the Contract Price in instalments as
provided in Schedule 5 (Rates and prices).

18.2 If any instalment is to be paid upon the completion of a specified task or

milestone, the Contractor shall only be entitled to apply for payment for that
instalment when he can provide evidence of completion of the task or milestone
as stated in Schedule 5.

18.3 The Contractor shall submit a request for payment to the Purchaser’s
Representative at intervals of not less than one calendar month showing:
(a) the Contractor's assessment of the amount to be paid for Works carried
out up to the end of the period for which it is submitted, together with any
other scheduled payment as may have become payable;
plus
(b) the amounts to which the Contractor considers himself entitled in
connection with all other matters for which provision is made under the
Contract;
less
(c) the total of all sums previously certified by the Purchaser’s
Representative for payment.

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 The Contractor's request for payment shall be supported by all relevant
documentary evidence appropriately itemised.
The Contractor’s final request for payment shall state that it is his final request
for payment.

18.4 Within fourteen days of the receipt of an interim request for payment, or in the
case of the final request for payment within fifty-six days of its receipt, the
Purchaser’s Representative shall issue a certificate to the Contractor and the
Purchaser for the instalment to which the request for payment relates. The
certificate shall show the sum which the Purchaser’s Representative considers
to be due at the payment due date determined in accordance with Sub-clause
18.5, and the basis on which it has been calculated. The total certified shall
comprise all sums listed in the Contractor's request for payment which, in the
opinion of the Purchaser’s Representative, are properly payable under the
Contract and shall show separately any elements within the sums certified in
respect of nominated Subcontractors. The Purchaser’s Representative may in
any certificate delete, correct or modify any sum previously certified by him as he
shall consider proper.

18.5 Any sum certified and notified as due in accordance with Sub-clause 18.4 shall
be due for payment fourteen days (or fifty-six days in the case of the final request
for payment) after the date of receipt by the Purchaser’s Representative of the
Contractor’s request for payment in accordance with Sub-clause 18.3. The
Purchaser shall pay the amount so notified by a date (the Final Date for
Payment) which shall be twenty-eight days (or seventy days in the case of the final
request for payment ) after the date of receipt by the Purchaser’s Representative
of the Contractor’s request for payment in accordance with Sub-clause 18.3.

18.6 If for any reason the Purchaser, or the Purchaser’s Representative on his
behalf, fails to notify the sum due in accordance with Sub-clause 18.4 by the
payment due date determined in accordance with Sub-clause 18.5 the sum
notified by the Contractor in his request for payment in accordance with Sub-
clause 18.3 shall be due for payment by the Final Date for Payment.

18.7 If the Purchaser intends to pay less than the sum due in accordance with Sub-
clause 18.4 or 18.6 for any reason including but not limited to sums that may be
due from the Contractor to the Purchaser under the Contract, the Purchaser
shall give notice to the Contractor not later than one day before the Final Date
for Payment, specifying the amount he considers to be due on the date the
notice is given and the basis on which that sum is calculated.

18.8 If the Purchaser does not make payment in full by the Final Date for Payment
of the amount of an instalment:
(a) certified and notified in accordance with Sub-clause 18.5; or
(b) where applicable in accordance with a notice issued under Sub-clause
18.7; or
(c) where applicable in accordance with Sub-clause 18.6;
or if either party does not make any payment due under any other provision of
the Contract by the Final Date for Payment the amount not paid shall bear
interest compounded daily from the Final Date for Payment until the amount not
paid is received by the other party at an annual rate which is two per cent above
the lending rate of the bank specified in the Agreement for the first month of
delay. The annual rate of interest shall be increased by a further two per cent at
the end of each further month of delay, up to the end of the third month. If the
delay exceeds three months the annual rate of interest shall thereafter be ten per
cent above the relevant lending rate.

18.9 If the Purchaser does not make payment in full by the Final Date for Payment
of the amount of an instalment:
(a) certified and notified in accordance with Sub-clause 18.5; or
(b) where applicable in accordance with a notice issued under Sub-clause
18.7; or

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 (c) where applicable in accordance with Sub-clause 18.6;
the Contractor may give the Purchaser notice of his intention to suspend
performance of any or all of his obligations under the Contract. If such failure
shall continue for seven days after the giving of such notice, then at any time
thereafter and provided such failure is still continuing, the Contractor may
suspend further performance of any or all as applicable of his obligations under
the Contract until payment is made.
The Purchaser’s Representative shall determine by means of a Variation
Order an extension to the Approved Programme and appropriate dates in
Schedule 11 (Times of completion) for the full period of suspension plus any
reasonable additional time incurred by the Contractor in resuming his
obligations and those of his Subcontractors. If the Contractor incurs additional
cost as a result of such suspension and subsequent resumption he shall be
entitled to be reimbursed such additional cost as he reasonably incurs.

18.10 If the suspension of performance of any, but not all, of the Contractor’s
obligations in accordance with Sub-clause 18.9 continues for a period of sixty
days the Contractor at any time thereafter may with immediate effect notify the
Purchaser that such obligation is excluded from the Contract. Thereafter the
Purchaser’s Representative shall by means of a Variation Order confirm the
exclusion together with the applicable change in the Contract Price.

If the suspension of performance of all of the Contractor’s obligations in

accordance with Sub-clause 18.9 continues for a period of sixty days the
Contractor at any time thereafter may with immediate effect terminate his
employment under the Contract by notice to the Purchaser copied to the
Purchaser’s Representative and thereupon the rights and obligations of the
parties shall be as stated in Sub-clause 23.4.

18.11 If the amount of a payment which is:

(a) notified in accordance with Sub-clause 18.4 (and no notice is given by the
Purchaser under Sub-clause 18.7 in respect of such payment); or
(b) stated in a notice given by the Purchaser under Sub-clause 18.7
is referred to an adjudicator appointed in accordance with Clause 28
(Adjudication) and if the decision of the adjudicator as to the amount which is to
be paid by the Purchaser is that more shall be paid than the amount stated as in
(a) or (b) as applicable, the additional amount shall be paid not later than:
(i) seven days from the date of the adjudicator’s decision; or
(ii) the Final Date for Payment
whichever is the later.

28 Adjudication
Re-number Sub-clause 28.8 as 28.10, and insert the following:

28.8 The Adjudicator may correct his decision so as to remove a clerical or

typographical error arising by accident or omission.

28.9 The Adjudicator may include in his decision a direction as to the allocation of his
fees and expenses as between the parties.

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Guide Notes
1. Sub-clause 1.2(e) of the General Conditions of Contract shall apply to these Guide Notes.

2. Purchasers and Purchaser’s Representatives should be aware of the need to issue a

certificate (under Sub-clause 18.4) or a ‘pay less’ notice (under Sub-clause 18.7) even if the
net sum to be paid to the Contractor is zero. Otherwise any sum sought by the Contractor will
be payable (see Sub-clause 18.6 – a requirement of the legislation).
nd
3. Users should note the requirement in Sub-clause 18.5 of the 2 Edition (2003) that the
Contractor submits an invoice following certification by the Purchaser’s Representative has
been deleted above. This is to ensure, as required by the legislation, that the payment due
date is not dependent on any action of the Purchaser or Purchaser’s Representative.