Sub Contactors, How Often Do You Check The Terms and Conditions You Receive?

Here is just one example of why you should: 

“If the Sub-Contractor considers that any event, instruction or issue of amended drawings constitutes a variation then within 7 days of the event or receipt of the instruction or amended drawings it must issue a notice in writing to the Contractor. Within 7 days of the issue of any Notice and as a condition precedent to any additional payment and/or extension of time arising due to the matters being the subject of the Notice, the Sub-Contractor shall submit a quotation”.

In simple terms, you have 7 days to notify of a variation event and a further 7 days to submit your quotation. This amendment is much more onerous than standard forms of contract, such as NEC or JCT. Under this Subcontract, this is your only entitlement to recover time and money. This has several practical implications:

1. It is highly unlikely that you will be able to review drawings and identify changes within 7 days, particularly with the manner with which volumes of drawings are electronically uploaded to web-based portals, often unannounced.

2. You may not know what the cost implications are by the time you are required to submit a quotation.

3. It Is unlikely that you will know what the time implications are by the time you are required to submit your quotation.

4. If you do not comply with this requirement and the carrying out of the variation subsequently has an impact on your Sub-Contract completion, you will have no entitlement to an extension of time. To make matters worse, you will have no defence against the imposition of any Delay Damages.

5. If you do comply with this requirement, the contractor will soon get fed up with you issuing notices, which may put a strain on your contractual relationship.

You may think that such an amendment is not ideal and that because you have a good working relationship with your client, they are unlikely to enforce such a strict provision. You may be lucky; however, many subcontractors are not, and it is likely that the imposition of such terms will become even more prevalent in the coming months as contractors look to protect their cash.

The best way to protect yourself is to review and agree the terms and conditions at the outset. Often, subcontractors are reluctant to do so for fear that this may jeopardise either their current or future workload. Our experience is that this will not happen; contractors choose you to complete the proposed specialist work on their behalf because of your competitive pricing and the level of service you usually provide. If you are a regular supply chain partner, you should be given beneficial terms of Sub-Contract and not terms that seek to punish you at every given opportunity.

If you need assistance with reviewing terms and conditions, we can do so for a fixed fee. Why not get in touch.

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