| CISR15600 | Action guide contents |
You may encounter the following terms in certain situations where a contractor withholds part of a contract payment.
A 'contra' is a charge for goods or services supplied to the
subcontractor. For example, on a contract worth £200, the
contractor gives the subcontractor some surplus materials and
restricts payment by £50.
A 'contra' does not reduce the 'payment' from which the
deduction may have to be made. It is in effect a 'payment' by the
contractor to the subcontractor. In the example given, and assuming
that the materials are not used in carrying out the construction
operations, the deduction should be calculated on the full contract
value of £200.
A 'set-off' arises when a contractor does not make a payment
because the contractor believes there has been a breach of
contract. For example, £400 of a £2,000 contract is
withheld because the work is below standard.
The 'set-off' reduces the 'payment' from which a deduction
may have to be made. It is not a payment by the contractor to the
subcontractor. In the example shown, the deduction should be made
from £1,600.
