Recent judgments from the Technology and Construction Court have reiterated that so-called smash-and-grab claims are not going away and remain an ever-present concern for any paying party to a construction contract.

Briefly, a smash-and-grab claim arises when a notified sum has arisen under a construction contract and the paying party fails to make payment of that notified sum beyond the final date for payment. Such claims typically arise when an application for payment is not suitably addressed by way of a corresponding payment and/or pay less notice, in which case the paying party must make payment of the notified sum in full. It is therefore imperative that paying parties understand their payment obligations under construction contracts so they can ensure appropriate notices are issued in time.

Pursuant to the Construction Act (as amended), all construction contracts must contain:

• An adequate mechanism for determining when payments become due
• A provision for compliant payment notices to be issued no later than five days after the payment due date
• An adequate mechanism for determining the final date for payment
• A provision for a compliant pay less notice to be provided in the event the paying party intends to pay less than the notified sum.

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