Security of payment

Security of Payment refers to any system designed to ensure that contractors and sub-contractors are paid even in case of dispute. This can involve a system of progress payments, interim arbitration decisions, or a system which legally requires a company to pay an invoice within a set number of days, regardless of whether the company believes they are accurate. Security of Payment in Australia Background Security of Payment legislation has been introduced by each Australian State and Territory to allow for the rapid determination of progress claims under building contracts or sub-contracts and contracts for the supply of goods or services in the building industry. This process, which establishes adjudication as the primary dispute resolution mechanism, was designed to ensure cash flow to businesses in the construction industry, without the parties getting tied up in lengthy and expensive litigation or arbitration. In addition to quick payment, the scheme also allows for security of payment to be provided in stages or payment schedule.