Notice of non-payment: the dispute clock
A notice of non-payment is the only way a payer can refuse, or partially refuse, to pay a proper invoice without losing the dispute. It must be delivered within a short statutory window and must give specific reasons for non-payment.
There are different forms depending on who is withholding payment and why, and one of them carries a mandatory undertaking to refer the matter to adjudication.
Strict timing
The notice of non-payment window is shorter than the owner-payment window. If a payer wants to dispute an invoice, the notice must be delivered before the dispute window closes. A late notice is generally no notice at all, and the invoiced amount becomes payable.
The forms
Prompt-payment frameworks that follow the Ontario model use a small family of notice forms. One is given by an owner to a contractor, one is given by a contractor to a subcontractor when the owner has paid, and one is given by a contractor to a subcontractor when the owner has not paid. The last of these requires the contractor to undertake to refer the dispute to adjudication within a set number of days.
Tiercord branches automatically to the correct form based on the parties and the payment status, and enforces the mandatory undertaking where it applies.
Reasons must be specific
A valid notice states the amount not being paid and the specific reasons for non-payment. Vague or boilerplate reasons can render the notice ineffective, which is why the wording matters as much as the timing.
Notice of non-payment, by province
The model above is common to the provinces that have enacted prompt payment. The law, its status and the exact day-counts, citations and forms are provincial. Pick yours:
Frequently asked questions
What happens if a notice of non-payment is late?
A late notice is generally treated as if no notice was given, so the full invoiced amount becomes payable, usually with interest from the date payment was due.
Does a notice of non-payment have to mention adjudication?
When a contractor withholds payment from a subcontractor because the owner has not paid, the notice must include an undertaking to refer the dispute to adjudication within the prescribed period. Other notice types do not always carry that requirement.