Bill proposes changes to construction contracts

An Infrastructure News article.

The proposed draft changes to the Construction Contracts retention regime are significant. Clause 18B(1) of the Bill defines “retention money” as “If party A makes a payment to party B and withholds an amount as security, the amount withheld is retention money …”.

This definition has not changed from the definition in the Construction Contracts Act 2002, and makes sense when thinking about retentions in the ordinary course – the amount or percentage agreed in the contract documentation as a withholding by the ‘payer’ (most commonly, a principal) from payment claims by the contractor or subcontractor.

Read more.