What is a Section 111 crystallised entitlement and how do I claim it?
By George Kershaw, Founder, ContraUpdated
Section 111 of the Construction Act requires a payer to pay the Notified Sum in full by the final date for payment unless they have served a valid Pay Less Notice. When no valid Pay Less Notice is served, that entitlement crystallises: the Notified Sum becomes a debt you claim by written demand and enforce through adjudication.
Key takeaways
- Section 111 requires the Notified Sum to be paid in full unless a valid Pay Less Notice reduces it.
- The entitlement crystallises the moment the Pay Less Notice deadline passes without a valid notice.
- Claim it by written demand; enforce it through adjudication.
- Your contract form (JCT 2024, NEC4) sets the dates; the Scheme fills any gap.
What Section 111 says
Section 111 is the requirement to pay the Notified Sum. The payer must pay it in full on or before the final date for payment. The only lawful way to pay less is a valid Pay Less Notice, served in time, stating the reduced sum and the basis for the reduction.
When the entitlement crystallises
The entitlement crystallises the moment the Pay Less Notice deadline passes without a valid notice. At that point the Notified Sum is fixed and due. It is not a valuation of the works and it is not open to a late challenge on quantum before it is paid - the main contractor must pay first and argue value afterwards. As Coulson J put it in S&T v Grove [2018] EWCA Civ 2448, a main contractor that missed its notices “has to pay the amount claimed by the contractor ... But the employer is then free to commence its own adjudication proceedings in which the dispute as to the ‘true’ value of the application can be determined”.
How to claim it
- Confirm no valid Payment Notice or Pay Less Notice was served in time.
- Fix the Notified Sum - the sum in the notice, or in your Application for Payment if none was served.
- Issue a dated, written demand for that sum, citing the missed notice and the final date for payment.
- Refer to adjudication under section 108 if it is not paid.
Your contract form sets the dates
The Construction Act sets the framework; your contract sets the specific due dates and notice periods. JCT 2024 and NEC4 each define them differently, and the Scheme for Construction Contracts fills any gap where a contract is silent or non-compliant. Check the contract particulars before you fix a date.
Where Contra fits
The Register™ holds every live receivable across every main contractor, The Clock™ runs the section 110A and section 111 windows for each contract form, and Crystallised Entitlement™ marks the sum yours the instant a deadline lapses - with the demand drafted from The Record™.
This guide is general information on UK construction payment law, not legal advice. Payment terms vary by contract; take advice on your specific position.
About the author
George Kershaw · Founder, Contra
George Kershaw is the founder of Contra, which builds Construction Act payment and deadline tracking for UK specialist subcontractors. He writes on subcontractor payment rights, the Housing Grants, Construction and Regeneration Act 1996, and construction adjudication.
Sources
Frequently asked
What is the Notified Sum under section 111?
The sum stated in the Payment Notice, or - if no Payment Notice was served - the sum in your Application for Payment acting as the default notice.
Does section 111 apply to every construction contract?
It applies to contracts for construction operations in the UK as defined by the Act. Some arrangements are excluded, such as contracts with a residential occupier. Check whether your contract falls within the Act.
Can the main contractor challenge the sum after it crystallises?
They must pay the crystallised Notified Sum first. They can then pursue a separate true-value adjudication to argue the correct valuation, but that does not delay the payment now due.
Related guides
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