Home > FAQ > Construction Law FAQ's > Are some construction contract retention clauses prohibited?

The Housing Grants, Construction & Regeneration Act 1996 does prohibit some retention clauses as follows:

  • Conditional retention clauses which link payment to the performance of obligations under another contract
  • The payer receiving payment from a third party — a ‘pay when paid’ clause
  • A retention clause that makes payment conditional upon a third party decision about obligations under a different contract
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