Common use of Payment of the Contract Price Clause in Contracts

Payment of the Contract Price. 5.1 Payment of the Contract Price shall be made by the Employer to the Contractor in accordance with the standard building draw practice of the Employer’s mortgage bank. In the event that the Employer is not drawing from a mortgage bond, the standard building draw practice of Standard Bank, will apply. 5.2 If the works are financed by a bank, or by any other financial institution acceptable to the Contractor, the Employer by executing this agreement, empowers and authorizes the Contractor to apply for and receive progress payments from the bank or financial institution. It is recorded that the financing institution will itself ensure that it does not pay more than the value of the work done by the Contractor as part of the bank’s service offering to the Employer, and as such the Employer will not dispute the timing or amount of the progress draws submitted by the Contractor. In cases where the works are financed, the progress instalments may differ from the breakdown provided. In the event of this agreement being subject to the Employer obtaining mortgage finance, then the Contractor will submit the necessary documents required by the financing institutions (called “Draw Documents”) to effect payment of progress instalments for signature by the Employer. So as not to delay the completion of the works, the Employer will ensure that the Draw Documents are signed by it and returned to the Contractor within 3 (three) days. Should the Draw Documents not be delivered to the Contractor timeously, or the Contractor not receive the progress payment in terms of such Draw Documents within 10(ten) days of the delivery of the Draw Documents, the Employer shall be liable for and shall pay, without demand by the Contractor, penalty interest on the total outstanding contract sum at prime rate per annum, calculated from the date that the Draw Documents are furnished to when the progress payment is received by the Contractor, and without prejudice to the Contractor’s rights. In the event of the works not being financed, payment in accordance with clause 5.1 will be made within 3 (three) days of the Contractor’s request. Should the Contractor not receive the progress payment within 3 (three) days of the Contractor’s request, the Employer shall be liable for and shall pay, without demand by the Contractor, penalty interest on the total outstanding Contract Sum at prime rate per annum, calculated from the date that the progress payment was due up to and including the date on which the progress payment is received by the Contractor, and without prejudice to the Contractor’s rights. 5.3 The Employer acknowledges that all water and electricity used during the construction period is a necessary part of the building process and that the costs of water and electricity usage, together with any sewerage surcharge, refuse collection fee, or services availability charged, are for the Employer’s account. The Contractor is also not liable for any rates and taxes in respect of the property. 5.4 If part of the Contract Price is financed by a bond, the Employer undertakes to pay the cash portion of the Contract Price according to the progress payment instalments as referred to in clause 5.1 above and the bond will be utilized for the subsequent payments. 5.5 Any agreed payments not paid on Due Date will bear interest in accordance with the provisions of Clause 17 below from the Due Date to date of final payment. 5.6 In the event of the Employer failing or refusing to authorize payment of any interim or final draws, the Contractor shall be entitled, without prejudice to any other rights which he may have, to discontinue the Works forthwith and all damages arising, costs, including the additional interest accrued, shall be for the account of the Employer.