For a qualifying micro or small supplier, a contract cannot safely extend payment beyond the section 15 limits. The Act says so in three places: the 45-day proviso, the “notwithstanding any agreement” opening of section 16, and the overriding clause in section 24. The better question for each clause is therefore which commercial terms survive, which are displaced and which remain available to the buyer.

1. Why the contract does not control

The proviso to section 15 limits what the parties may agree in writing to 45 days. Section 16 applies “notwithstanding anything contained in any agreement” and prescribes the interest rate. Section 24 gives sections 15 to 23 effect despite any inconsistent law. Together they make the payment period and the interest consequences a matter of statute for qualifying suppliers, whatever a standard-form credit clause says.

2. A clause-by-clause view

The table sets out how common buyer-side terms fare. It is a framework for review rather than a prediction for any particular contract.

3. What a buyer can still do

•      Negotiate shorter terms or an early-payment discount, and keep the supplier’s written acceptance.

•      Reject non-conforming goods in writing within 15 days of delivery, with reasons.

•      Raise genuine counterclaims in the Council’s arbitration.

•      Pay undisputed amounts on time and dispute only the balance, since the full invoice is not safely withheld because part of it is in question.

4. What a supplier should do

A supplier’s strongest position is documentary: a delivery record, the date of any buyer objection and the date it was cured, and a record of reminders. The Supreme Court observed in Sonali Power that suppliers often hesitate to claim for fear of losing future business, but the limitation clock keeps running in the meantime. A commercial decision to wait is also a decision about the time left for arbitration.

5. Limits of the protection

The provisions apply to suppliers who are micro or small enterprises. A medium or large supplier gets none of this, whatever the contract says, so the first step in any such dispute is to establish the supplier’s status and the date of supply (Article 5). Where the amount is substantial, take advice on the contract itself before applying any general rule.