A Construction Demand Letter is employed when payment for construction work remains outstanding and formal action is required. It represents a critical step in the payment recovery process under English and Welsh construction law, typically issued after payment notices have been ignored and before initiating legal proceedings. The letter must detail the outstanding amount, payment terms, and relevant contractual provisions, while complying with the Construction Act and pre-action protocols. It serves both as a final demand for payment and potential evidence in subsequent legal proceedings.
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1. Recipient Details: Full name and address of the recipient, including company registration details if applicable
2. Contract Reference: Details of the relevant construction contract including project name, contract date, and reference numbers
3. Outstanding Amount: Clear statement of the amount owed with breakdown if applicable
4. Payment History: Summary of relevant payment applications, certificates and current payment status
5. Demand Statement: Formal demand for payment with specified amount and deadline for payment
6. Legal Basis: Reference to relevant contract terms and statutory rights under construction legislation
1. Interest Calculation: Details of statutory interest claims under the Late Payment of Commercial Debts (Interest) Act 1998
2. Threat of Legal Action: Statement of intended legal proceedings if payment is not received by the specified deadline
3. Right to Suspend: Notice of intention to suspend works under the Construction Act 2009
1. Schedule 1 - Payment Applications: Copies of relevant payment applications and certificates
2. Schedule 2 - Contract Extracts: Relevant sections of the construction contract supporting the payment claim
3. Schedule 3 - Payment Records: Evidence of previous payments made and outstanding amounts
4. Schedule 4 - Interest Calculations: Detailed breakdown of interest calculations if statutory interest is being claimed
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