What happens if a client does nothing following receipt of a claim that complies with the act?Example: A client receives a payment claim on the 1st April for the amount of $50,000 for the completion of cladding, which is due on the 20th April. If the client does nothing, they must pay the amount of $50,000 on or before the 20th April. Consequences apply if the client does not make payment by or on the due date.
Question
What happens if a client does nothing following receipt of a claim that complies with the act?Example: A client receives a payment claim on the 1st April for the amount of 50,000 on or before the 20th April. Consequences apply if the client does not make payment by or on the due date.
Solution
If a client receives a compliant claim and does nothing in response, they are legally obligated to pay the full amount stated in the claim by the due date. In the given example, the client would need to pay the $50,000 for the completion of cladding by the 20th of April.
If the client fails to make this payment by the due date, they may face consequences. These consequences can vary depending on the specific terms of the contract and the laws of the jurisdiction, but they often include interest on the overdue amount, potential legal action, and possible damage to the client's credit rating.
It's important to note that the client has the right to dispute the claim if they believe it is incorrect. However, they must do this before the payment due date. If they do not dispute the claim and also do not make the payment, they are in breach of their obligations under the act.
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