Down tools legally: the seven-day notice that stops the job and bills for the stoppage

The final date for payment went by. £46,200 is still outstanding, the site manager is asking when you are back on the third floor, and the quantity surveyor has stopped answering. At some point in that week somebody on your side says the obvious thing, which is that you should pull the lads off until they pay.

Do that on a phone call and you have probably repudiated your own subcontract, and the party who owes you money gets to accept the repudiation, engage somebody else, and charge you the difference. Do exactly the same thing on seven days' written notice and it is a statutory right that costs them money instead. The difference between the two is one document.

This page is section 112 of the Housing Grants, Construction and Regeneration Act 1996: what has to be true before the right exists, what the notice has to say, what you can actually stop doing, and how the Act makes the party in default pay for the stoppage and give you the programme time back.

Walking off and suspending are two different acts

Leaving site without a contractual or statutory right to leave is a breach of your obligation to proceed with the works. Where the breach goes to the root of the contract, and abandoning the works usually does, the innocent party can treat the contract as at an end and claim the cost of completing with somebody else. On a job where you are the specialist and the replacement price is 30% higher, that number can be larger than the debt you were chasing.

Section 112 exists so that a party who has not been paid does not have to choose between funding the job out of its own pocket and putting itself in breach. It gives a right, and it says so in terms: "the person to whom the sum is due has the right (without prejudice to any other right or remedy) to suspend performance of any or all of his obligations under the contract to the party by whom payment ought to have been made". A suspension exercised inside section 112 is performance of the contract, not a departure from it.

Two words in that sentence do a lot of work. Right means the payer's consent is not part of the mechanism: they can dispute the sum, and the suspension still happens. The party by whom payment ought to have been made means you suspend against your own payer. If you are a sub-subcontractor whose money is stuck with the subcontractor who engaged you, the notice goes to that subcontractor, not to the main contractor and not to the employer, whatever the main contractor tells you about where the money is really sitting.

Whose contracts carry the right

Part II of the 1996 Act is implied into your contract whether or not either party has read it, and it applies to construction operations in England, Wales and Scotland.

Section 105(1) sets out what a construction operation is, and the list is wide: construction, alteration, repair, maintenance, extension, demolition or dismantling of buildings or structures forming part of the land; walls, roadworks, power lines, railways, pipelines and sewers; installation in any building of heating, lighting, air conditioning, ventilation, power supply, drainage, sanitation, water supply, fire protection, security and communications systems; site clearance, earth moving, excavation, tunnelling and boring, laying of foundations, erection and dismantling of scaffolding, site restoration and landscaping; and painting or decorating internal or external surfaces. Section 105(2) takes a short list back out, including drilling for oil and gas, mineral extraction, the assembly and installation of plant on process sites such as nuclear, power generation, water treatment, chemicals and pharmaceuticals, the manufacture or delivery to site of components where the contract does not also provide for their installation, and work that is wholly artistic in nature.

Three things decide whether section 112 is available to you on this particular job.

Your customer is not a residential occupier. Section 106(1) disapplies the whole of Part II for a construction contract with a residential occupier, which section 106(2) defines as a contract which principally relates to operations on a dwelling which one of the parties to the contract occupies, or intends to occupy, as his residence. A loft conversion for the family who live in the house sits outside the Act, so there is no statutory suspension right, no statutory adjudication and no notified sum. On that job the right to stop work has to be written into your own terms, and putting it there is the point of getting paid by a homeowner.

Your contract does not have to be in writing. The old section 107, which confined Part II to contracts in writing, was repealed when the 2009 amendments came into force. A subcontract agreed on site and confirmed by text message is inside the Act.

The 2009 amendments apply to it. Section 112 in its current form, including the costs entitlement, applies to construction contracts entered into on or after 1 October 2011 in England and Wales and 1 November 2011 in Scotland. Northern Ireland runs the same machinery under its own statute: Article 11 of the Construction Contracts (Northern Ireland) Order 1997 carries the suspension right in wording that tracks section 112 subsection for subsection, including the costs entitlement at Article 11(3A), amended into force there on 14 November 2012.

The preconditions, in the order they have to be true

Section 112(1) hangs the right on one condition: that "the requirement in section 111(1) applies in relation to any sum but is not complied with". So the whole of the payment notice machinery sits upstream of the suspension, and you check it in order.

Precondition 2 is the one people read too narrowly. A pay less notice does not switch off section 112. Section 111(6) says that where a pay less notice is given, the duty to pay applies only in respect of the sum the payer specified. So if they served a valid pay less notice putting your £46,200 at £31,000 and then paid nothing, the requirement in section 111(1) applies to £31,000 and has not been complied with. The right to suspend is alive on their own number. Where the two notice deadlines were missed altogether, your application is the notified sum in full, and that is the pay less notice deadline.

Precondition 4 matters at the other end. Section 112(3) says the right to suspend ceases when the party in default "makes payment in full of the sum referred to in subsection (1)". A part payment landing on the morning your suspension is due to start does not end it. £20,000 against a £46,200 notified sum leaves the requirement in section 111(1) uncomplied with, and the right stands on the balance.

Counting it from a real date

Take a subcontract with no compliant payment mechanism of its own, so the Scheme for Construction Contracts (England and Wales) Regulations 1998 supplies the dates. The relevant period is 28 days and ends on 31 May 2026, and the application goes in the same day.

Two things about that count are worth doing deliberately.

Section 112(2) says "at least seven days' notice". Serve on 25 June, treat 26 June as day one and 2 July as day seven, and start on a date after that. Naming 08:00 on Monday 6 July rather than the earliest arguable moment costs you two days and removes the only procedural argument the payer has. When the suspension is later worth £2,712 in costs and sixteen days of programme, buying that argument out for two days is cheap.

And the notice can go before the money is late in your head but after it is late in law. The trigger is the final date for payment passing, which was 24 June, not the day the credit controller stops replying. The seven days start running the day you serve, so a notice served on 25 June has the site stopping on 6 July, while a notice served when patience finally runs out on 15 July has it stopping on 24 July. The document is what converts the wait into pressure.

What the notice has to say

Section 112(2) sets the content requirement in one line: the right may not be exercised without first giving the party in default at least seven days' notice of intention to suspend performance, "stating the ground or grounds on which it is intended to suspend performance".

That is the whole statutory test, and it is a low bar deliberately. There is no prescribed form, no prescribed wording and no adjudicator to approve it. Section 115(1) lets the parties agree how notices are served and section 115(3) provides, where they have not, that a notice may be served by any effective means. Section 115(4) treats a notice as effectively served where it is addressed, pre-paid and delivered by post to the addressee's last known principal business address or, for a company, to its registered or principal office. Section 115(6) confirms that a notice includes any form of communication in writing. Email to the named contact plus a posted copy to the registered office covers both routes for the price of a stamp.

The reason a good notice runs longer than the statutory minimum is not the statute. It is that the same document has to work six months later in front of an adjudicator who was not on site, and every date it records is a date somebody would otherwise be trying to reconstruct from a WhatsApp thread.

The notice

NOTICE OF INTENTION TO SUSPEND PERFORMANCE
Section 112(2), Housing Grants, Construction and Regeneration Act 1996

To:        [Payer's registered name and company number]
           [Registered office and, if different, the site office]
From:      [Your registered name and company number]
Date:      25 June 2026
Served:    by email to [name, address] and by first class post to the
           registered office
Contract:  Subcontract dated 12 January 2026 for [scope of works] at
           [site name and address] ("the Subcontract")

1. THE SUM DUE AND UNPAID
   Application for payment number 5, dated 31 May 2026, in the sum of
   £46,200.00 plus VAT.
   Payment due date: 7 June 2026.
   No payment notice was given by 12 June 2026.
   No notice of intention to pay less was given by 17 June 2026.
   The notified sum is therefore £46,200.00 plus VAT.
   Final date for payment: 24 June 2026.
   Received to date: nil. Outstanding: £46,200.00 plus VAT.

2. GROUND OF SUSPENSION
   The requirement in section 111(1) of the Housing Grants, Construction
   and Regeneration Act 1996 applies in relation to the notified sum of
   £46,200.00 plus VAT and has not been complied with. That is the sole
   ground on which it is intended to suspend performance.

3. NOTICE
   This is notice under section 112(2) of that Act of our intention to
   suspend performance of our obligations under the Subcontract.

4. THE OBLIGATIONS TO BE SUSPENDED
   All of our obligations under the Subcontract, including the supply to
   the site of labour, plant, materials, temporary works, design
   information and supervision, save that we will continue to perform our
   obligations relating to the physical protection of the works already
   executed and to the maintenance of the insurances required by the
   Subcontract.

5. WHEN SUSPENSION BEGINS
   Suspension will begin at 08:00 on Monday 6 July 2026, being more than
   seven days after the date of this notice.

6. HOW IT ENDS
   Under section 112(3) the right to suspend ceases on payment in full of
   the sum identified in paragraph 1. Performance will resume as soon as
   reasonably practicable after receipt of cleared funds in that sum.

7. COSTS AND TIME
   Under section 112(3A) you will be liable to pay a reasonable amount in
   respect of costs and expenses reasonably incurred by us as a result of
   the exercise of this right. Under section 112(4) the period of the
   suspension will be disregarded in computing, for the purposes of any
   contractual time limit, the time taken to complete the works, and the
   dates for completion will be adjusted accordingly.

8. RESERVATION
   This notice is given without prejudice to any other right or remedy,
   including the right under section 108 to refer a dispute to
   adjudication at any time and the right to statutory interest and
   compensation under the Late Payment of Commercial Debts (Interest)
   Act 1998.

Signed: [name], [position], for and on behalf of [company]

Paragraph by paragraph, and why each line is in there.

Paragraph 1 is the arithmetic that makes paragraph 2 true. The five dates are what an adjudicator checks, in that order, and a notice that recites them has already made the payer's case for them impossible to construct on the hoof.

Paragraph 2 is the only paragraph section 112(2) actually demands. Stating the ground as non-compliance with section 111(1) is exact, and "the sole ground" closes off the argument that you were really suspending for some other reason and dressed it up.

Paragraph 3 labels the document. A letter that reads like a chaser and leaves out the words "notice under section 112(2)" invites the answer that it was taken for another reminder rather than a statutory notice.

Paragraph 4 picks up "any or all" from section 112(1) and is the paragraph to think hardest about.

Paragraph 5 fixes the date. A notice that says "in seven days" hands the payer a counting argument. A notice that names a date and a time does not.

Paragraph 6 tells them exactly how to switch it off, which is the point of sending it. The pressure comes from the payer being able to see the off switch.

Paragraph 7 puts the two entitlements on the record on day one, so the costs invoice that lands later is a consequence of a notice they read rather than a surprise.

Paragraph 8 keeps the other routes open, because suspending is not choosing between remedies. Adjudication runs alongside it, and so does interest.

What "any or all of your obligations" lets you stop

Before the 2009 amendments the right was to suspend performance of your obligations, full stop. Section 145 of the Local Democracy, Economic Development and Construction Act 2009 inserted "any or all of" into section 112(1), which is what makes partial suspension available.

That matters because total and partial suspension are different commercial instruments. Total suspension is the loudest thing you can do and works when the job cannot progress without you. Partial suspension is sharper on a job where one activity is on the critical path and the rest is not: stop the riser installation that the follow-on trades are waiting for, keep the snagging gang going, and the delay lands squarely on the item the main contractor is being measured on.

What comes off site under a total suspension is your labour, your plant, your materials not yet incorporated, your temporary works, your supervision and your design information. Plant on hire is the item to move first, because standing charges on a scissor lift you are not using are money leaving your account for somebody else's default. Off-hire it on the day the notice goes out where the hire agreement's notice period allows it, because the hire charges you cannot avoid are recoverable under section 112(3A) and the ones you could have avoided are harder to defend as reasonably incurred.

What continues is the short list in paragraph 4 of the notice, and the reasoning behind it is practical rather than legal. Insurance in place over part-finished works that are yours until practical completion protects your own exposure, and a policy lapsed during a suspension is a self-inflicted wound. The physical protection of what you have already built is the same logic: covering a first fix or capping an open pipe run is an afternoon's work against a claim for damage that will be laid at your door.

Site security is not on your list, and that is worth knowing rather than assuming. Regulation 13(4)(b) of the Construction (Design and Management) Regulations 2015 puts the duty to take the necessary steps to prevent access by unauthorised persons to the construction site on the principal contractor. A subcontractor whose labour has left under section 112 is not the party holding the gate. What you do leave behind is a safe workface: hoardings, edge protection and covers over openings that your works created stay where they are, and the suspension notice is not a right to leave a hazard.

Billing the stoppage

This is the part that turns a suspension from a gesture into a cost the payer can see. Section 112(3A): "Where the right conferred by this section is exercised, the party in default shall be liable to pay to the party exercising the right a reasonable amount in respect of costs and expenses reasonably incurred by that party as a result of the exercise of the right."

Read the words that limit it, because they tell you what belongs on the invoice. It is costs and expenses, so it is the money the stoppage cost you to execute rather than a general claim for lost profit or disruption. It is reasonably incurred, so it needs to look like the response of somebody managing the situation properly. And it is as a result of the exercise of the right, so the test is whether the item would have been spent if you had carried on working, which is exactly the test that keeps demobilisation and remobilisation in and keeps the office overheads you would have paid anyway out.

For the suspension counted above, running 6 July to 22 July 2026 for a two-operative second fix gang:

£2,712 on a fourteen-day stoppage, on top of the £46,200 that was owed in the first place. The daily rate in the first column is the all-in cost of putting an operative on site rather than the wage, which is what an hour actually costs you.

Two habits make that invoice stick. Photograph and date the plant leaving and returning, and keep the off-hire confirmation, because "reasonably incurred" is evidenced with documents rather than asserted. And invoice the section 112(3A) costs as a separate line rather than folding them into the next application, so that a payer who wants to dispute them has to dispute them openly instead of absorbing them into a valuation.

Where the payer disputes the whole thing, the same route that recovers the debt recovers these costs: section 108 gives a right to refer a dispute to adjudication at any time, and a decision lands within 28 days of the referral. That is starting an adjudication. On a large or unusual suspension, an hour with a solicitor who does construction adjudication before the notice goes out is worth having, because the notice is the document the whole claim is built on.

Getting the programme time back

Section 112(4) is the other half of the bargain, and it is drafted to remove the argument entirely: "Any period during which performance is suspended in pursuance of, or in consequence of the exercise of, the right conferred by this section shall be disregarded in computing for the purposes of any contractual time limit the time taken, by the party exercising the right or by a third party, to complete any work directly or indirectly affected by the exercise of the right. Where the contractual time limit is set by reference to a date rather than a period, the date shall be adjusted accordingly."

Three phrases in there are load-bearing.

"Or in consequence of the exercise of" was inserted by section 145 of the 2009 Act, and it extends the disregarded period past the day the money arrives. In the count above the right ceased on 20 July when the payment cleared, but labour and plant were not back in production until 22 July. Those two remobilisation days are consequence, not suspension, and section 112(4) covers them. The period disregarded runs from 6 July to 22 July, sixteen days.

"By the party exercising the right or by a third party" covers the follow-on trades. If your suspension held up the plasterers and their work is measured against the same contractual dates, that knock-on time is disregarded too. This is the sentence that makes a suspension expensive for a main contractor: the programme moves, their obligations to the employer do not automatically move with it, and they own the gap.

"The date shall be adjusted accordingly" deals with the common drafting where your subcontract names a fixed completion date rather than a duration. A completion date of 4 September 2026 becomes 20 September 2026 by operation of the Act. Write that adjusted date into the letter that goes with your first application after you return, so it is on the record before anybody starts talking about liquidated damages.

Resuming

Section 112(3) ends the right the moment payment in full is made, and there is no window afterwards. Once the £46,200 clears, staying off site is no longer a suspension: it is the walk-off described at the start.

So the resumption is a planned event rather than a reaction. The notice already committed you to resuming "as soon as reasonably practicable" after cleared funds, which is the right standard: it means the day your gang and your plant can realistically be back, not the same afternoon. Book the remobilisation the day the payment is confirmed, tell the main contractor the date and time in writing, and record the two dates that section 112(4) is counted between.

If the payer pays and then does the same thing on the next application, the mechanism resets from zero. There is no limit in section 112 on how many times the right can be exercised, and a payer who has already funded one lot of demobilisation and remobilisation costs tends to find the second application easier to certify.

In Scotland the Act and section 112 are identical, with the Scheme for Construction Contracts (Scotland) Regulations 1998 as amended by SSI 2011/371 supplying the same 17-day, 5-day and 7-day periods, and enforcement running through the Court of Session or the sheriff court. In Northern Ireland the right sits in Article 11 of the Construction Contracts (Northern Ireland) Order 1997 with the notified sum in Article 10. Across all four nations, suspension is one of the four routes open to an unpaid subcontractor, and the reason it matters so much here is structural: there is no construction lien or statutory holdback trust anywhere in the United Kingdom, which is what a UK contractor has instead of a lien.

What it costs

Serving a section 112 notice costs nothing. It is a page of writing, an email and a stamp, and the Act supplies the form by supplying the ground.

On AEC Stack there is no monthly subscription. The platform fee is 2.5% of each invoice processed through the platform, taken when the invoice is paid, so a month spent suspended costs nothing. Your applications carry the sum and the basis of calculation section 110A asks for, the payment due date, the payment notice deadline, the pay less deadline and the final date for payment are counted from the day each one goes out against the periods in your own subcontract, and the suspension costs sit as their own invoice line against the job they came from rather than disappearing into the next valuation.

Put the date your unpaid application went in against the periods in your subcontract, and see whether the final date for payment has already passed and your seven days can start today: open the payment dates panel.