The pursuers were seeking the sum of £8,730 from the defender, together with interest and expenses. The parties agreed that there was a contract within the meaning of the Construction Act and that the first invoice for £1,000 had been paid. The pursuer argued that two further invoices had not been paid. In addition, the defender brought a counterclaim for £40,000.

Section 110 of the Act requires construction contracts to contain an “adequate mechanism for determining what payments became due under the contract, and when”. The parties could not agree on whether the basic payment mechanisms in the contract were adequate and complied with the Section 110 requirement. If the payment process in the contract was not adequate then the Scheme would apply, incorporating monthly payments due on a certain date, and paid within a defined period. It was argued that, as a matter of law, the contract was unclear and so the Scheme should apply.

Was the contractual payment mechanism “adequate”?