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Purchase
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A1
Client's Brief/
Purchaser's Brief
A2
The Services
A3
Supplier's key personnel; project team
A4
Risk allocation schedule
A5
Key Performance Indicators
A6
Payment Terms
A7
Agreed form of collateral warranty deed
A8
Supplementary conditions

A6
Purchase order

Payment Terms
 

The payment terms applicable to the performance of the Services are either set out below or attached.

Please either complete the attached information or add the payment terms that will apply.

There are two alternatives for handling payment terms. Alternative A (below) is based on defined stages in the project, while Alternative B is based on a payment schedule.
 

Alternative A: Target cost

Target cost

The Target Cost for the performance of the Services is: £. . . . .

Guaranteed maximum cost

The Guaranteed Maximum Cost is: £ . . . .

Supplier's margin

The Supplier's Margin will be: £. . . . (. . .% of the Target Cost)

The Supplier’s Margin may be expressed as a fixed or variable fee or percentage of the Target Cost or any other variation that may be agreed between the parties. It is recommended that, however the Supplier’s Margin is calculated initially, it should be expressed as a fixed sum.

Instalments of Supplier's Margin

Instalments of the Supplier's Margin will be paid on the dates, or the occurrence of the events, set out below or as set out in the separate document attached:

Date/event

Amount/percentage of Supplier's Margin payable

Cumulative total

1

    

2

    

3

    

4

    

5

    

6

    

Sharing differences between Actual Cost and Target Cost

If the total of the Actual Cost of completing the provision of the Services is less than the Target Cost, the difference will be shared between the Purchaser and the Supplier in the following percentages:

Difference

Percentage retained by Purchaser

Percentage due to Supplier

£. . . to £. . .

. . .%

. . .%
     
     

If the total of the Actual Cost of completing the provision of the Services exceeds the Target Cost but is less than or equal to the Guaranteed Maximum Cost (if any), the difference will be borne by the Purchaser and the Supplier in the following percentages:

Difference

Percentage borne by Purchaser

Percentage borne by Supplier

£. . . to £. . .

. . .%

. . .%
     
     

Interest on late payment

Interests on late payments will be at the rate of [. . .]% above the base rate for lending of . . . . . . . . Bank plc.
 

Alternative B: Lump sum price

Lump sum payment

The Lump sum payment for the performance of the Services is £. . . .

Payment by reference to a Payment Schedule

The Payment Schedule or Schedules comprise the following documents:

Date

Document title

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on late payment

Interests on late payments will be at the rate of [. . .]% above the base rate for lending of . . . . . . . . Bank plc.

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Be
PO Box 2874
London Road
Reading RG1 5UQ
www.constructingexcellence.org.uk
T 0870 922 0034
F (0118) 975 0404
Email bemail@constructingexcellence.org.uk
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