Is there any specific legislation relating to payment in the industry?


Norway Small Flag Norway

No, the payment is regulated in the contract between the parties.

Sweden Small Flag Sweden

The principle of freedom of contract is very strong in Swedish law. There is no specific legislation that will interfere with the parties’ freedom to agree the payment conditions. The Interest Act (which may be set aside by contract) provides for penalty interest for late payment (currently 7.5% p.a.)

Hong Kong Small Flag Hong Kong

There currently is no specific legislation relating to payment in the construction industry. However, in April 2016, the Development Bureau of the Hong Kong Government published its report on the public consultation on the proposed security of payment legislation ("SOPL") for the construction industry. The report generally supports the proposed terms of the SOPL.
The legislative framework of the proposed SOPL envisages that it will cover both the public sector (i.e. the Government and 31 specified statutory bodies/corporations, including the Housing Authority, Airport Authority and MTRC) and the private sector contain. It is intended that the SOPL will contain the following key obligations and rights:
• Parties can agree payment periods between applications and payments but not exceeding 60 calendar days (interim payments) or 120 calendar days (final payments).
• A right to dispute resolution by adjudication – a rapid procedure under which an adjudicator gives an independent decision on the dispute and the amount of any payment due.
• The right to adjudication arises in the event of non-payment and when there are disputes about the value of work, services, materials or plant and/or disputes about extensions of time and financial claims under the contract.
• The maximum period allowed for adjudications from appointment of an adjudicator to issue of the adjudicator’s decision will be 55 working days unless the parties both agree to a longer period. Straightforward cases should be decided more quickly.
• If either party is unhappy with an adjudicator’s decision, they still have the right to refer to dispute to court or arbitration (if specified in the contract). Any amount the adjudicator decided as due must, however be paid in the meantime.
• Unpaid parties have the right to suspend or reduce the rate of progress of work after either non-payment of an adjudicator’s decision or non-payment of amounts admitted as due.
The next step is for the Government to finalise the actual framework and wording of the legislation and to prepare the bill for submission to the legislature.

United Kingdom Small Flag United Kingdom

The HGCRA 1996 prescribes a detailed interim payment mechanism to which nearly all UK construction contracts must conform. The Act envisages that the contractor will submit an interim payment application showing the amount it consider due at the “due date”; the employer (or contract administrator) must submit a payment notice recording “the sum due”; and then the employer must submit a “pay less notice” if it intends to pay less than the amount stated in the payment notice. The sum due must be paid on or before the “final date for payment”, and if not paid, can be recovered by way of adjudication Minor errors in the contents or timing of a notice may invalidate it and such errors often cannot be remedied until the next interim payment cycle.

United States Small Flag United States

On public projects in the United States, Congress has imposed on agencies an obligation to pay every “proper invoice” within 30 days after its receipt. Under the Prompt Payment Act, an agency that fails to pay within the required time will be liable for interest on the delinquent payment. Furthermore, while the invoice must be "proper" in order to trigger the Prompt Payment Act requirements, an agency may not impose unreasonable requirements on its submission.

Many states have adopted their own version of the Prompt Payment Act that provides contractors or subcontractors who do work or furnish materials under a contract with prompt payment for materials or services provided. This type of statute is considered a corollary to a state’s mechanic’s lien law. The amount must be “undisputed,” i.e., there is no good faith dispute over the amount owed. Monies withheld by the owner or by an upstream contractor that are the subject of a dispute do not fall within the statute.

Serbia Small Flag Serbia

There is no specific legislation relating especially to payments in the construction industry. Nevertheless, there is the general Law on deadlines for settlement of pecuniary obligations in commercial transactions, according to which the longest deadline for the payments amongst legal entities within the Republic of Serbia are 60 days, respectively 45 days when a publicly owned entity is the debtor. However, hardly any one respects that law in practice.

Updated: April 24, 2018