Counting the days, and getting it right

The payment provisions of a construction contract are a chain of dates. Each one is derived from the one before it, which means an error at the start travels all the way to the end without announcing itself.

What follows is the arithmetic, and the four places it goes wrong.

The chain

Every payment cycle runs through the same four points, whatever the contract:

Note that only one of these is counted backwards, and it is the one with the harshest consequence for being late.

Error one: counting from the application

The most common mistake. Deadlines are not counted from when the contractor applied. They are counted from the due date, which is derived from the valuation date fixed by the contract.

An early application does not bring the due date forward. A late application does not push it back. On contracts where the application is habitually a few days adrift, surveyors who diary from the email quietly build a permanent offset into every deadline they hold.

Error two: assuming the JCT periods everywhere

Typical JCT particulars give a payment notice not later than five days after the due date, a final date for payment fourteen days after the due date, and a pay less notice not later than five days before the final date.

The Scheme, which applies where the contract's own mechanism is non-compliant, gives seventeen days to the final date and seven days for the pay less notice. NEC4 with Option Y(UK)2 works from assessment dates and its own stated periods.

Error three: calendar days and business days

Unless the contract says otherwise, periods expressed in days are usually calendar days. Some contracts and some amendments specify business days, and amended contracts are where this most often changes without anyone noticing.

The difference is not academic. Five calendar days spanning a bank holiday weekend and five business days spanning the same weekend are three days apart, which is enough to move a valid notice into invalidity.

Check the definitions clause. If it defines "days" or "business days", that definition governs, and it governs every period in the contract, not only the ones you are thinking about.

Error four: the first day

When a period is expressed as a number of days after an event, the general position is that the day of the event itself is not counted. The count starts the following day.

So a payment notice due "not later than five days after the due date", where the due date is a Monday, is due by the Saturday, not the Friday. Getting this backwards costs a day in the direction that matters.

A worked example

Interim valuation date on the 20th of each month. JCT particulars: due date seven days after the valuation date; payment notice within five days of the due date; final date fourteen days after the due date; pay less notice not later than five days before the final date.

• Valuation date: 20 August
• Due date: 27 August
• Payment notice: by 1 September
• Final date for payment: 10 September
• Last date for a pay less notice: 5 September

Five dates, four of them derived. Now do that for eleven live jobs on three different contract forms, every month, while doing the actual surveying. That is the real problem, and it is not an intellectual one.

The discipline

• Take the periods from the contract particulars once, at project set-up, and write them down
• Derive every date from the due date, never from the application
• Check whether "days" is defined before assuming calendar days
• Count the pay less deadline backwards, and diary it separately from the valuation
• Re-derive the chain if the valuation date ever moves

Arithmetic performed once and stored is arithmetic that stays right. Arithmetic performed monthly under time pressure is arithmetic that will eventually be wrong on the job where it matters most.