You are here:

Construction Law/Release of Advance Payment

Advertisement


Question
Dear Sir,

Is physical mobilization required to release an Advance Payment to a contractor?

What are the other documents required except Advance Payment Guarantee and Performance Guarantee?

Regards,
P

Answer
Dear Priyanka,

Thank you for this question.

The contract for the project should clearly state what the Contractor is required to provide or perform before the Employer releases the advance payment.

Referring you to the 1999 FIDIC Red Book form of contract, for example, at sub-clause 14.2 provides that the Employer will make an advance payment. To receive that advance the contractor must provide to the Employer the performance security and guarantees and must make application to the Engineer to issue a payment certificate. If the Engineer does not issue the certificate, the Employer is not obliged to pay.

The FIDIC form referred to here does not require the Contractor to mobilise prior to payment of the advance, however such a condition cn be included specifically for a project through the Particular Conditions.


I hope that this assists you.

Kind regards,
John Dowse

Follow me on Twitter: @CernoOrg
For my regular industry newsletter e-mail to info@cerno.org, stating SUBSCRIBE in the subject line

Training and consulting services are available, bespoke to companies and individuals.
John Dowse can be contacted by e-mail to info@cerno.org (When e-mailing, please include “AllExperts” in the subject line.)

Construction Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


John Dowse

Expertise

Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.

Experience

Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Organizations
Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Publications
Various UK and International construction and legal publications.

Education/Credentials
LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

©2016 About.com. All rights reserved.