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This Practice Note examines statutory and contractual rights to suspend performance of obligations under a construction contract, which principally arise in the event of a failure by an employer to pay an amount due. The statutory right arises under the provisions of section 112 of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) which deal with when and how the right to suspend can be exercised. This Practice Note then considers how the standard form JCT, NEC and FIDIC contracts deal with Suspension as a consequence of the HGCRA 1996 or non-payment, and also looks at wider contractual rights for a contractor to suspend performance of its obligations (ie not just because of non-payment).

Suspension can be a valuable tool for putting pressure on an employer that is not paying its bills (either at all, or on time). However, a contractor has no general right to suspend works in the absence of any express contractual or statutory provisions, and suspension in such circumstances could be wrongful (see ‘Wrongful suspension’ below) and the decision in Energy Works v MW High Tech. Suspension can