Payment Claims

Progress payment claims play a crucial role in ensuring the smooth flow of funds and maintaining the financial health of projects. These claims are periodic requests for payment submitted by contractors or subcontractors to the owner or client, typically based on the work completed or materials supplied during a specific period.

The significance of progress payment claims lies in their ability to mitigate cash flow issues and provide contractors with the necessary funds to cover project costs, such as labour, materials, equipment, and overhead expenses. Without prompt and fair progress payments, contractors may face financial difficulties, potentially leading to project delays, quality compromises, or even insolvency.

Progress payment claims are typically supported by documentation that demonstrates the work performed or materials supplied. This documentation may include progress reports, site inspections, material delivery receipts, and other relevant evidence. The claims are then reviewed and approved by the owner or their designated representatives, ensuring that the requested payments align with the agreed-upon contract terms and the actual progress made on the project.

The process of submitting and approving progress payment claims is often governed by specific contractual provisions and industry standards. These provisions outline the procedures, timelines, and requirements for submitting claims, as well as the mechanisms for dispute resolution in case of disagreements over the claimed amounts.

Timely progress payments are essential for maintaining positive working relationships between contractors, subcontractors, and owners. Delays or disputes in payment can strain these relationships, leading to potential legal disputes, project disruptions, and reputational damage for all parties involved.

Progress payment claims play a vital role in the construction industry by facilitating the flow of funds, ensuring contractors are adequately compensated for their work, and supporting the overall financial health and timely completion of construction projects.

We regularly publish insights about the validity of payment claims across different jurisdictions in the Asia-Pacific region.