Arecent case said that the limits on when a developer may withhold payments to its contractor do not apply to a contractor that wants to withhold the payment of liquidated damages. Contract drafting bodies should correct this double standard.rnThe changes that the Construction Act introduced to assist cash flow after the last recession are now being put to their toughest test. For many, the amendments to the act, which are expected later this year, cannot come soon enough. However, most developers will not be among them.rnBalfour Beatty's recent dispute with developer Modus Corovest over the late completion of Blackpool's Houndshill shopping centre shows why. Modus' agent awarded Balfour only limited extensions of time. As a result, Modus was, it seemed, due liquidated damages of ￡2m. It took the option under the contract (a JCT1998 With Contractor's Design) of claiming the ￡2m as a debt in court (albeit in proceedings that Balfour started).
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