The Bill also applies to a broader range of contracts than those governed by the Construction Act. A “construction contract” in the Bill is defined as “in addition to the meaning given by section 104 [of the Construction Act] shall also include any contract created to have a similar effect to a construction contract for the purposes of withholding monies which would otherwise be due under the contract”. The intention behind this broader definition appears to be as an anti-avoidance measure. The Bill is due to have its second reading on 15 June 2018 and it is hoped that further detail as to the proposals made will emerge through the debate process. Although providing a basis for discussion, the Bill leaves a number of issues unaddressed. For example, the Bill does not answer questions such as who will bear the cost of the scheme, how will the money be held (i.e. is it in trust to protect against insolvency), when will the money be released (this is left to the regulations to be issued by the national authority) and who will be entitled to any interest accrued. The Bill also does not deal with how to resolve disputes as to whether the conditions for payment of retention have been met, bearing in mind that the level of the sums held may make any formal dispute proceedings uneconomic to pursue. The Bill also appears not to have properly considered the effect on multi-tiered projects. In its present state, the Bill appears to require retention to be paid into a deposit scheme at every tier, entailing a significant doubling up of funds. This will worsen the cashflow burden for contractors in the middle of a contractual chain, as they need to pay out to a deposit scheme the same funds which have already been withheld from them higher up the chain. However, it may be beneficial to sub-contractors where they have fulfilled their own provisions for release of retention but the main contractor (or other subs) have not. More detailed drafting is likely to be needed to specify that retentions lower down a contractual chain can avail of payments into a deposit scheme made higher up the chain. Clarity as to the ownership of the funds held by the deposit scheme will also be needed in such circumstances to protect against the insolvency of one of the parties in the contractual chain. Regardless of these concerns the Bill is gathering a lot of support throughout the industry and with MPs. Earlier this month, a petition on behalf of over 355,000 companies and many self-employed professionals was presented to the Prime Minister in support of the Bill. It is also thought that significant cross-party support exists for the reform of retention practices. Time will tell whether this most recent attempt comes to fruition. Thanks to CMS. Termination for convenience A party terminating a contract for repudiation or otherwise for default by the other party will usually be entitled to compensation for loss of the contractual bargain. This will often take the form of a loss of profits claim for the remaining term of the contract. However, complications can arise where the defaulting party nonetheless had a contractual right to terminate for convenience. Is the innocent party still able to claim for loss of profits for the remaining duration of the contract on the assumption that the right to termination for convenience would not have been exercised? The cases on this issue are not entirely consistent. In Comau v Lotus Lightweight, the court took a strict approach, finding that a termination for convenience clause eliminated a right to claim for loss of profit. The court noted that to find otherwise would ignore the limited nature of the innocent party’s “expectation interest” in the contract: “[it] was never entitled to profits on the whole of the goods and services to be supplied pursuant to the Agreement but was only ever entitled to such profit as it might have gained prior to any ‘termination for convenience’.”