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REINWOOD LTD v L BROWN & SONS LTD

An employer was, in accordance with a notice of intention to deduct served pursuant to provisions in a JCT construction contract, entitled to deduct from a payment certificate a sum representing damages for non-completion, even if the certificate of non-completion had been cancelled by the subsequent grant of an extension of time.

26 February 2008

The appellant contractor (B) appealed against a decision ((2007) EWCA Civ 601) that it had not been entitled to determine a contract made between itself and the respondent (R) on the basis that R had withheld a sum due in payment. B was a contractor engaged by R pursuant to a contract in JCT standard form. The contract specified a completion date and provided for extensions of time, damages for non-completion and determination by the contractor on specified defaults. In December 2005, B applied for an extension of time. The project's architect issued a certificate of non-completion and an interim certificate for payment. Pursuant to the contract, the final date for payment of the sum due under that certificate was 25 January 2006. On 17 January, R served notice of its intention to withhold liquidated and ascertained damages from B and, on 20 January, R paid B the sum stipulated in the certificate, less damages. Three days later the architect, pursuant to B’s earlier application, r...

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