12—Effect of "pay when paid" provisions
(1) A
pay when paid provision of a construction contract has no effect in relation
to any payment for construction work carried out or undertaken to be carried
out (or for related goods and services supplied or undertaken to be supplied)
under the contract.
(2) In this
section—
"money owing", in relation to a construction contract, means money owing for
construction work carried out or undertaken to be carried out (or for
related goods and services supplied or undertaken to be supplied) under the
contract;
"pay when paid provision" of a construction contract means a provision of the
contract—
(a) that
makes the liability of 1 party (the "first party ) to pay money owing to
another party (the "second party") contingent on payment to the
first party by a further party (the "third party") of the whole or a
part of that money; or
(b) that
makes the due date for payment of money owing by the first party to the
second party dependent on the date on which payment of the whole or a
part of that money is made to the first party by the third party; or
(c) that
otherwise makes the liability to pay money owing, or the due date for payment
of money owing, contingent or dependent on the operation of another contract.