22.1.1 The Authority should ensure that the Contract contains an express right for the Authority to deduct liquidated amounts owed to it by the Contractor under the Contract from any payments it is obliged to make to the Contractor (whether during the Service Period or on termination). This applies to liquidated damages and all other debts or liabilities owed to the Authority (including amounts owed in respect of failure by the Contractor to comply with its maintenance obligations at the end of the Contract (see Section 10 (Surveys on Expiry and Termination)). Senior Debt service should not be insulated from set-off or deductions.
22.1.2 Set-off on termination is dealt with specifically in Section 24.4 (Set-off on Termination).
22.1.3 The right to set-off being described here does not apply to deductions for non-availability or sub-standard performance of the Service (see Section 19 (Price and Payment Availability and Performance Mechanism) as these are contractual deductions which apply automatically if the relevant circumstances arise (e.g. if the availability or performance criteria are not met). Disputes relating to these are dealt with under Section 34 (Dispute Resolution).