Sep 1, 2012
CONTRACTORS, SUBCONTRACTOR, PAYMENT AND COMPLETION
In the construction industry, payment is the sum of money paid to contractors after their works or certain projects has been successfully realized. Payments are so important to contractors that it is a constant headache for them as problems in construction would always be revolving around the poor payment practices. In a typical engineering and construction contract, it is apparent that the contractor has promise to carry out all the works under the contracts. On the other hand, the employer must keep his side of promise by giving necessary consideration which in most cases comes in monetary form. There are two basic payment provisions in virtually every subcontract and in most purchase orders. First is the progress payment whereby the Contractor generally makes payment based upon percentage of completion. Second is the completion payment whereby the Contractor generally makes payment upon completion and acceptance of the work. In order to ensuring the flow of the work activities under the contract and its eventual successful realization, construction contracts had been drafted. Most of these standard forms of contracts contain specially drafted clauses which govern all aspects of the subject of payment under the contract.
The above article is part of a paper, Chuah San Yu, Abdelnaser Omran, Abdul Aziz Hussin, CONTRACTORS, SUBCONTRACTOR, PAYMENT AND COMPLETION, The Proceedings of THE INTERNATIONAL CONFERENCE IN ECONOMICS AND ADMINISTRATION, ICEA–FAA 2012, June 8-9th, 2012. The Faculty of Business and Administration,
, pp. 504-511. University of Bucharest, Romania