Termination of Construction Contracts for Non-Payment
1. Non-payment is a common cause of disputes in construction projects. In turn, contractors may consider themselves justified in resorting to termination as a response to prolonged refusal by an upstream party, whether a main contractor or employer, to make payment. The question then is when, and in what situations, such termination is defensible.
2. The recent decision of LBE Engineering Pte Ltd v Double S Construction Pte Ltd,1 rendered by Justice Lee Seiu Kin in the Singapore High Court, addressed some of these issues. In that case, the plaintiff sub-contractor alleged that as the defendant main contractor had failed to certify payment to the plaintiff, it was unable to continue work and therefore stopped work on 18 June 2018. The plaintiff thereafter commenced the suit against the defendant claiming an outstanding amount of $90,845.35, while the defendant filed a counterclaim for damages suffered as a result of alleged...
Contributed by: Matthew Koh - Rajah & Tann Singapore LLP
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