Preface xiii
1 Background and Introduction 1
1.1 The Joint Contracts Tribunal (JCT) 1
1.2 Sub-contracting 1
1.3 The formation of contracts and sub-contracts 2
1.4 Standard forms of contract and sub-contract 6
1.5 The JCT Sub-contracts dealt with within the chapters of this book 7
1.6 The JCT Sub-contracts not dealt with in the chapters of this book 10
2 The Sub-contract Agreement 17
2.1 Introduction 17
2.2 The structure of the sub-contract agreement 19
2.3 The recitals 20
2.4 The articles 22
2.5 The sub-contract particulars 23
2.6 Attestation forms 35
2.7 Schedule of information 37
2.8 Supplementary particulars 38
2.9 Equivalent sub-contract provisions 38
3 Definitions and Interpretations 44
3.1 Introduction 44
3.2 Definitions 44
3.3 Interpretation 45
3.4 Reckoning periods of days 46
3.5 Contracts (Rights of Third Parties) Act 1999 46
3.6 Giving of service of notices and other documents 46
3.7 Effect of the final payment notice (or the default payment notice) 47
3.8 Applicable law 49
3.9 Equivalent sub-contract provisions 49
4 Sub-contractors’ General Obligations 51
4.1 Introduction 51
4.2 General obligations 53
4.3 Sub-contractor’s design 59
4.4 Materials, goods and workmanship 71
4.5 Compliance with main contract and indemnity 75
4.6 Errors, discrepancies and divergences 76
4.7 Equivalent sub-contract provisions 80
5 Time 85
5.1 Introduction 85
5.2 Time and the adjustment to the period for completion 86
5.3 Practical completion and lateness 96
5.4 Equivalent sub-contract provisions 98
6 Defects, Design Documents and Warranties 102
6.1 Introduction 102
6.2 Defects 103
6.3 Sub-contractor’s design documents 107
6.4 Collateral warranties 108
6.5 Equivalent sub-contract provisions 113
7 Control of the Sub-contract Works 114
7.1 Introduction 114
7.2 Assignment and sub-letting 116
7.3 Person-in-charge 118
7.4 Access provided by the sub-contractor 119
7.5 Opening up the works and remedial measures 119
7.6 Attendance and site conduct 123
7.7 Health and safety and CDM 129
7.8 The CDM Regulations (i.e. the Construction (Design and Management) Regulations 2015) 135
7.9 Suspension of the main contract by the contractor 142
7.10 Benefits under the main contract 146
7.11 Certificates/statements or notices under the main contract 146
7.12 Equivalent sub-contract provisions 147
8 Payment 150
8.1 Introduction 150
8.2 The amount due in respect of interim payments 151
8.3 Unfixed materials 152
8.4 The amount due in respect of the final payment 153
8.5 Retention 156
8.6 Payment due dates and final dates for payment for interim payments 159
8.7 Payment Notices and Pay Less Notices for interim payments 160
8.8 The payment due date and the final date for payment for the final payment 162
8.9 Payment Notices and Pay Less Notices in respect of the final payment 162
8.10 VAT (Value Added Tax) 164
8.11 Construction Industry Scheme (CIS) 164
8.12 Interest 164
8.13 Sub-contractor’s right of suspension 165
8.14 Fluctuations 166
8.15 Equivalent sub-contract provisions 167
9 Loss and Expense 171
9.1 Introduction 171
9.2 Can common law damages claims be excluded by the contract? 173
9.3 Are claims for extensions of time and loss and/or expense linked? 173
9.4 What are the grounds/requirements for loss and expense? 174
9.5 What are Relevant Sub-contract Matters? 174
9.6 Can the contractor recover direct loss and/or expense from the sub-contractor? 176
9.7 In pursuing a loss and expense claim, what does a sub-contractor need to prove? 177
9.8 What needs to be proved in a loss and expense claim document? 179
9.9 What is a global claim? 180
9.10 Common heads of a loss and expense claim 182
9.11 Prolongation costs 183
9.12 Disruption claims 186
9.13 Winter working 187
9.14 Head office overheads and profit 187
9.15 Loss of profit 190
9.16 Increased costs 190
9.17 Cost of claim preparation 191
9.18 Interest and finance charges 191
9.19 Acceleration 192
9.20 Common law damages 193
9.21 Equivalent sub-contract provisions 196
10 Variations 197
10.1 Introduction 197
10.2 What is a variation? 198
10.3 How is a variation instructed? 198
10.4 Can a variation vitiate a contract? 199
10.5 Must a sub-contractor comply with all variation directions issued? 200
10.6 Must a sub-contractor comply with all variation directions issued that may injuriously affect the efficacy of the sub-contractor’s design? 200
10.7 What happens if a sub-contractor does not comply with a direction issued? 201
10.8 How should variations be valued? 201
10.9 How should variations that relate to a sub-contractor’s design work be valued? 201
10.10 What is the procedure to be followed in respect of a schedule 2 quotation? 202
10.11 What are the valuation rules? 205
10.12 Equivalent sub-contract provisions 210
11 Injury, Damage and Insurance 214
11.1 Introduction 214
11.2 Sub-contractor’s liability for personal injury or death 215
11.3 The sub-contractor’s liability for injury or damage to property 216
11.4 The sub-contractor’s liability for loss or damage to the sub-contract works 217
11.5 What Specified Perils insurance cover, in respect of loss or damage to works and site materials, does the sub-contractor obtain under the joint names all risks policies? 218
11.6 What is the sub-contractor’s liability for damage to the sub-contract works? 218
11.7 What are the employer’s options where terrorism cover is not available? 220
11.8 Is the contractor responsible for damage caused to the sub-contractor’s plant, etc.? 221
11.9 Is the sub-contractor required to take out professional indemnity insurance? 221
11.10 When and how does the Joint Fire Code apply? 222
11.11 Equivalent sub-contract provisions 223
12 Termination of Sub-contract 226
12.1 Introduction 226
12.2 How can a contract come to an end? 227
12.3 What can cause a sub-contract to be terminated? 228
12.4 What is a breach of contract? 228
12.5 Will any breach of contract enable one to terminate the sub-contract? 228
12.6 What is a repudiatory breach at common law? 229
12.7 Why have termination provisions in the contract if the sub-contract can be terminated at common law? 229
12.8 What is the effect of a sub-contract being terminated at common law? 230
12.9 Are the effects of a sub-contract being terminated under common law or by contractual provisions the same? 230
12.10 Where can the contractual termination provisions be located in the Sub-contract? 231
12.11 Are the party’s common law termination rights preserved under the Sub-contract? 231
12.12 What reasons give the contractor a right to terminate the sub-contractor’s employment under the JCT Sub-contract Conditions? 231
12.13 What is deemed to be default by the sub-contractor under clause 7.4.1 of SBCSub/D/C? 231
12.14 What happens when a sub-contractor commits a specified default noted at clause 7.4.1 of SBCSub/D/C? 232
12.15 Must all notices either by the Contractor or the Sub-contractor referred to under Section 7 ‘Termination’ of the sub-contract conditions be given in accordance with clause 1.7.4? 233
12.16 What does insolvency of the sub-contractor mean? 233
12.17 What happens when the sub-contractor becomes insolvent? 234
12.18 What does corruption entail? 235
12.19 What are the consequences of the contractor terminating the sub-contractor’s employment? 235
12.20 What reasons give the sub-contractor the right to terminate his or her employment under the JCT subcontract conditions? 237
12.21 What is deemed to be default by the contractor under clause 7.8.1 of SBCSub/D/C? 237
12.22 What happens when a contractor commits a specified default noted under clause 7.8.1 of SBCSub/D/C? 238
12.23 What does insolvency of the contractor mean? 239
12.24 What happens when the contractor becomes insolvent? 239
12.25 What are the consequences of the sub-contractor terminating his or her own employment? 240
12.26 If a sub-contractor’s employment is terminated for any reason, can it subsequently be reinstated? 242
12.27 Equivalent sub-contract provisions 242
13 Settlement of Disputes 245
13.1 Introduction 245
13.2 Mediation 245
13.3 Adjudication 247
13.4 Arbitration 253
13.5 Litigation 260
13.6 Equivalent Sub]contract provisions 263
Table of Cases 265
Table of Statutes and Regulations 269
Index 271
