http://www.legislation.gov.uk/ukpga/1996/53/section/113Housing Grants, Construction and Regeneration Act 1996An Act to make provision for grants and other assistance for housing purposes and about action in relation to unfit housing; to amend the law relating to construction contracts and architects; to provide grants and other assistance for regeneration and development and in connection with clearance areas; to amend the provisions relating to home energy efficiency schemes; to make provision in connection with the dissolution of urban development corporations, housing action trusts and the Commission for the New Towns; and for connected purposes.1996-07-24texttext/xmlenStatute Law Database2025-05-23Expert Participation2025-05-19 Part II1131A provision making payment under a construction contract conditional on the payer receiving payment from a third person is ineffective, unless that third person, or any other person payment by whom is under the contract (directly or indirectly) a condition of payment by that third person, is insolvent.2For the purposes of this section a company becomes insolvent—awhen it enters administration within the meaning of Schedule B1 to the Insolvency Act 1986,bon the appointment of an administrative receiver or a receiver or manager of its property under Chapter I of Part III of that Act, or the appointment of a receiver under Chapter II of that Part,con the passing of a resolution for voluntary winding-up without a declaration of solvency under section 89 of that Act, ordon the making of a winding-up order under Part IV or V of that Act.3For the purposes of this section a partnership becomes insolvent—aon the making of a winding-up order against it under any provision of the Insolvency Act 1986 as applied by an order under section 420 of that Act, orbwhen sequestration is awarded on the estate of the partnership under section 22 of the Bankruptcy (Scotland) Act 2016 or the partnership grants a trust deed for its creditors.4For the purposes of this section an individual becomes insolvent—aon the making of a bankruptcy order against him under Part IX of the Insolvency Act 1986, orbon the sequestration of his estate under the Bankruptcy (Scotland) Act 2016 or when he grants a trust deed for his creditors.5A company, partnership or individual shall also be treated as insolvent on the occurrence of any event corresponding to those specified in subsection (2), (3) or (4) under the law of Northern Ireland or of a country outside the United Kingdom.6Where a provision is rendered ineffective by subsection (1), the parties are free to agree other terms for payment.In the absence of such agreement, the relevant provisions of the Scheme for Construction Contracts apply.S. 113 wholly in force; s. 113 not in force at Royal Assent see s. 150; s. 113 in force at 1.5.1998 by (E.W.) S.I. 1998/650, art. 2 and (S.) S.I. 1998/894, art. 2S. 113(2)(a) substituted (15.9.2003) by The Enterprise Act 2002 (Insolvency) Order 2003 (S.I. 2003/2096), art. 1(1), Sch. para. 30 (with art. 6)1986 c. 45. Words in s. 113(3)(b) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 17(a)Word in s. 113(4)(b) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 17(b)Pt. 2 excluded (E.W.) (5.5.2023) by The Construction Contracts (Exclusion) (Wales) Order 2023 (S.I. 2023/475), arts. 1(3), 3