6 Council CONNECT May 2018 Commercial Disputes Councils enter into many contracts under which contractors undertake to carry out construction work or supply related goods and services to Council in its capacity as principal. These construction contracts are subject to the provisions of the SOP Act. Council must ensure it has processes and procedures to respond to all contractor progress claims issued under the SOP Act by providing a payment schedule. The payment schedule: >  must be provided within 10 business days (or sooner if required by the construction contract) >  must indicate the amount of the payment that Council proposes to make >  if the amount is less than claimed by the contractor, the payment schedule must indicate all the reasons why. Failure to issue a payment schedule within the required time frame has dire consequences, as experienced by the builder in this cautionary tale. A progress claim made under the SOP Act used to be easily identifiable, as it carried the warning that it was “a progress claim made under the Building and Construction Industry Security of Payment Act 1999”. However, SOP progress claims are no longer required to carry this warning. This raises the question: how will Council know it has been served a progress claim under the SOP Act? Our advice is that Council should now regard any claim made by a contractor under a construction contract as a claim made under the SOP Act. Council must also be aware that the period for providing a payment schedule cannot be extended by the court or by agreement between Council and its contractor, and the 10 business day period must be strictly complied with. Failure to do so may see the contractor entitled to recover payment through the Court under the SOP Act, with Council having no opportunity to raise a defence or cross claim.