Definitions
1.1 Unless the context otherwise requires or this Subcontract specifically provides otherwise, the
following words and phrases, where they appear in capitalised form in the Agreement or these
Conditions, shall have the meanings stated or referred to below:
Agreement: the Agreement between the Parties, consisting of the
documents as set out in the Order for Subcontract Work into
which these Conditions are incorporated.
CDM Regulations: the Construction (Design and Management) Regulations 2007
Certificate of
Practical Completion see clause 5.5.
Conditions: clauses 1 to 17.4 of these Conditions.
Contractor: The person named as Contractor in the Agreement.
Final Release Date: see clause 12.6 and the Order for Subcontract Work
Insolvent: insolvent, within the meaning of section 113 of the Housing
Grants, Construction and Regeneration Act 1996.
Main Contract Conditions: the conditions of the Main Contract as stated in the Agreement
Main Contract Works: the Main Contract Works as briefly described in the Agreement.
Minimum Retained Amount: see clause 12.5 and the Order for Subcontract Work
Numbered Documents: the documents listed and annexed to the Agreement.
Order: The Order for Subcontract Work which sets out the Particulars
of the Agreement
Parties: the Contractor and the Subcontractor together.
Party: either the Contractor or the Subcontractor.
Period for Completion: see the Order for Subcontract Work
Pricing Documents: any document(s) identified in the Numbered Documents listed
in the Agreement showing rates and prices for the Subcontract
Works.
Schedule of Modifications: the schedule of amendments to the Subcontract Conditions (if
any) included in the Numbered Documents.
CIS Scheme: Part 1 of the Schedule to The Scheme for Construction Contracts
(England and Wales) Regulations 1998.
Site: the place or places where the Main Contract Works are to be
carried out.
Subcontract Conditions: see Conditions.
Subcontract Documents: the documents referred to in the Agreement.
Subcontract Sum: see the Order for Subcontract Work
Subcontract Works: the works referred to in the Agreement and described in the
Numbered Documents, including any changes made to such
works in accordance with this Subcontract.
Subcontractor: The person named as Subcontractor in the Agreement.
Statutory Requirement: any statute, statutory instrument, regulation, rule or order
made under any statute or directive having force of law which
affects the Subcontract Works or performance of any
obligations under this Subcontract and any regulation or byelaw of any local authority or statutory undertaker which has
any jurisdiction with regard to the Subcontract Works or with
whose systems they are, or are to be, connected
VAT: Value Added Tax.
Reference to clauses etc.
1.2 Any reference in these Conditions to a clause or statute or a provision of a statute shall be construed
as a reference to that clause or statute or provision as amended, re-enacted or extended at the time
the Subcontract Works are carried out and completed by the Subcontractor.
Headings, reference to persons, legislation etc.
1.3 In the Agreement and Conditions, unless the context requires otherwise:
1.3.1 the headings are included for convenience only and shall not be taken into account in
interpreting this Subcontract;
1.3.2 words importing the singular include the plural and vice versa;
1.3.3 words importing a particular a gender include the other gender and the neuter;
1.3.4 a reference to a person includes any individual, firm, partnership, limited liability
partnership, trust, company and any other body corporate;
1.3.5 references to a Party shall, where relevant, be deemed to be references to or include, as
appropriate, its respective lawful successors, assigns or transferees;
1.3.6 a reference to any statute, statutory instrument, legislation or other subordinate
legislation is to such legislation or subordinate legislation as amended and in force from
time to time, including any legislation or subordinate legislation which amends, extends,
re-enacts or consolidates or replaces the same and shall include any orders, regulations,
codes of practice, instruments or subordinate legislation made under statute or statutory
provision, with or without modification, and including corresponding legislation or
subordinate legislation in any other relevant part of the United Kingdom.
Subcontract to be read as whole
1.4 This Subcontract is to be read as a whole, provided that:
1.4.1 if there is any inconsistency between the Agreement and these Conditions, the Agreement
shall prevail;
1.4.2 if there is any inconsistency between the Subcontract Documents (other than the
Numbered Documents) and the Numbered Documents, those Subcontract Documents
shall prevail;
1.4.3 if there is any inconsistency between the Subcontract Documents and the Main Contract
Conditions, the Subcontract Documents shall prevail;
Contracting out of the contra proferentem rule
1.5 The interpretation rule known as the contra proferentem rule shall not apply to the interpretation
of this Subcontract, nor shall any similar rule or approach to interpretation, and accordingly the
provisions of this Subcontract, the Subcontract Conditions or otherwise shall not be interpreted
narrowly against the Contractor.
Severability
1.6 If any clause of this Subcontract is or becomes illegal, invalid or unenforceable in whole or in part
under any enactment or rule of law such term or part shall to that extent be deemed not to form
part of this Subcontract but the validity and enforceability of the remainder of this Subcontract shall
not be affected.
Waiver
1.7 The failure of the Contractor to insist upon the strict performance of any provisions of this
Subcontract, or to exercise any right or remedy to which it is entitled hereunder, shall not constitute
a waiver thereof and shall not cause a diminution of the obligations established by this Subcontract.
1.8 No waiver of any of the provisions of this Subcontract shall be effective unless it is expressly stated
to be a waiver and communicated to the other Party in writing in accordance with the provisions of
clause 1.11 to 1.13.
Reckoning periods of days
1.9 Where under this Subcontract an act is required to be done within a specified period of days after
or from a specified date, the period shall begin immediately after that date. Where the period would
include Christmas Day, Good Friday or a day which under the Banking and Financial Dealings Act
1971 is a bank holiday that day shall be excluded.
Contracts (Rights of Third Parties) Act 1999
1.10 Nothing in this Subcontract confers or is intended to confer any right to enforce any of its terms on
any person who is not a party to it.
Giving or service of notices and other documents
1.11 A notice or other document by the Subcontractor may be served only in accordance with clause
1.12.
1.12 A notice or other document shall be treated as effectively served if it is addressed, pre-paid and
delivered recorded delivery by post:
1.12.1 to the addressee’s last known principal residence, or, if he is or has been carrying on a
trade or business, its last known principal business address; or
1.12.2 where the addressee is a body corporate, to the body’s registered or principal office.
1.13 A notice or other document by the Contractor may be served by any effective means.
Subcontractor’s obligations
2.1 The Subcontractor shall carry out and complete the Subcontract Works in a proper and workmanlike
manner and in compliance with the Subcontract Documents, Construction Health and Safety Plan,
statutory requirements and in conformity with any directions (including variations) given by the
Contractor in accordance with the Subcontract and in relation to the Subcontract Works, the
Subcontractor shall give all notices required by the Statutory Requirements.
2.2 The Subcontractor shall provide goods and materials of the standard stated in the Subcontract
Documents or, where no standard is so stated, all goods and materials shall be of satisfactory quality
and fit for purpose and to the Contractor’s satisfaction.
2.3 The Subcontractor shall provide everything required to carry out and complete the Subcontract
Works except for the attendances set out in the Subcontract Documents which the Contractor shall
provide free of charge to the Subcontractor.
2.4 The Subcontractor warrants to the Contractor that the Subcontract Works will be performed by
appropriately qualified and trained personnel, with adequate supervision, adequate labour,
adequate resources and with reasonable skill, care and diligence and to a high standard of quality
of workmanship expected of an experienced Subcontractor carrying out Subcontract works for
projects of a similar size, scope and complexity.
2.5 The Subcontractor shall ensure that no debris, packaging or other trade waste is allowed to
accumulate on the Site at any time and in particular on completion of the Subcontract Works under
the Subcontract. The Subcontractor shall ensure that the Site is left in a neat and tidy state, clear
of any Subcontractor’s and/or trade waste and any damage occasioned to adjacent surfaces shall
be made good by the Subcontractor at its own expense.
2.6 The Subcontractor shall indemnify Contractor against all liability, loss, damages, charges, costs and
expenses (including legal expenses) awarded against or incurred or paid by the Contractor as a result
of or in connection with:-
2.6.1 breach of any warranty given by the Subcontractor in relation to the Subcontract Works;
2.6.2 any breach, default, act or omission of any of the Subcontractor’s personnel or agents in
connection with the performance of the Subcontract Works; and
2.6.3 any breach, default, act or omission of the Subcontractor or its personnel or agents in
connection with any Health and Safety Rules, Codes, Statutes or Regulations.
2.7 The Subcontractor shall take all reasonable steps to encourage employees and agents of the
Subcontractor and its Subcontractors employed in the execution of the Subcontract Works to be
registered cardholders under the Construction Skills Certification Scheme (CSCS) or qualified under
an equivalent recognised qualification scheme.
2.8 The Subcontractor shall not assign this Subcontract nor sub-let any of the Subcontract Works,
without prior written consent of the Contractor (including to factoring companies or agencies or
otherwise).
2.9 The Subcontractor shall comply with, and give all notices required by, any statute, any statutory
instrument, local authority regulations, rule or order or any regulation or bye-law applicable to the
Subcontract Works (including the CDM Regulations). The Subcontractor shall pay any and all fees
and charges payable in respect of notices required in connection with the Subcontract Works.
2.10 Without limiting the Subcontractor’s statutory and/or regulatory duties and responsibilities and/or
the specific health and safety requirements of this Subcontract, the Subcontractor and the
Contractor shall endeavour to establish and maintain a culture and working environment in which
health and safety is of paramount concern to everybody involved with the project.
2.11 In addition to the specific health and safety requirements of this Subcontract, the Subcontractor
undertakes to:
2.11.1 comply with any and all approved codes of practice produced or promulgated by the
Health and Safety Executive and/or the Health and Safety Commission;
2.11.2 ensure that all personnel and agents engaged by the Subcontractor and members of the
Subcontractor’s supply chain on site receive appropriate site-specific health and safety
induction training and regular refresher training;

2.11.3 ensure that all personnel and agents engaged by the Subcontractor and members of theSubcontractor’s supply chain have access at all times to competent health and safetyadvice in accordance with regulation 7 of the Management of Health and Safety at WorkRegulations 1999; and

2.11.4 ensure that there is full and proper health and safety consultation with all personnel
engaged by the Subcontractor in accordance with the Health and Safety (Consultation
with Employees) Regulations 1996 (as amended), if applicable.
2.12 The Subcontractor shall agree to abide by the security rules of the Contractor or any security rules
that may relate to the Site and in particular will inform its employees and/or agents that they will
be required to submit to being searched on leaving the Site if called upon by an officer or agent of
the Contractor or any client of Contractor.
2.13 The Subcontractor shall indemnify the Contractor against any and all Health and Safety invention
fees (HSE Intervention Fees), including but not limited to, all liability, loss, Health and Safety
invention fees, damages, charges, costs, expenses, legal expenses awarded against or incurred or
paid by the Contractor as a result of or in connection with any breach, default, act or omission of
the Subcontractor or its personnel or agents in connection with any Health and Safety Rules, Codes,
Statutes or Regulations.
2.14 The Subcontractor is encouraged to suggest viable amendments to the Subcontract Works which,
if directed as a Variation, may result in a reduction in costs in the carrying out of the Subcontract
Works.
2.15 The Subcontractor is encouraged to suggest economically viable amendments to the Subcontract
Works which, if directed as a Variation, may result in an improvement in environmental
performance in the carrying out of the Subcontract Works.
2.16 The Subcontractor shall provide to the Contractor all information that it reasonably requests
regarding the environmental impact of the supply and use of materials and goods used by the
Subcontractor in the Subcontract Works.
2.17 Any specification supplied by Contractor to the Subcontractor, or specifically produced by the
Subcontractor for the Contractor in connection with the Subcontract, together with copyright,
design rights or any other intellectual property rights in the specification shall be the exclusive
property of the Contractor. The Subcontractor shall not disclose to any third party or use such
specification except where it becomes public knowledge through no fault of the Subcontractor, or
as is required by the Contractor.
2.18 The Subcontractor acknowledges that it has acquainted itself or has had the opportunity so to do
with the Site, Site requirements, conditions, access restrictions and any other restrictions and all
other matters that may be relevant to carrying out and completing the Subcontract Works and that
such matters have been and are allowed for in the Subcontract Sum.
2.19 The Subcontractor agrees that by entering into this Subcontract and/or by commencing the
Subcontract Works that it shall undertake the Subcontract Works in accordance with the
Subcontract to the exclusion of all other terms, conditions, warranties and representations. The
Subcontractor warrants that any and all of the Subcontract Works it has carried out before the date
of the Subcontract and/or its acceptance of the Subcontract complies with the Subcontract in all
respects.
2.20 The Subcontractor shall not be entitled, for advertising purposes, to write or affix its name in any
way to the Subcontract Works or any temporary works such as scaffolding, hoardings or the like
unless previously agreed with the Contractor in writing.
2.21 The Subcontractor shall satisfy itself in good and sufficient time before commencing any part of the
Subcontract Works as to the position, dimensions and suitability of any previous work by the
Contractor or others, which might affect the Subcontract Works and shall promptly advise the
Contractor in writing if any such previous work is out of position, wrongly dimensioned or in any
other way unsuitable. The Subcontractor shall not be entitled to any adjustment of the Subcontract
Sum or to an extension of time in respect of any discrepancy in position or dimension or other
unsuitability of any such previous work unless the Subcontractor shall have advised the Contractor
of the same in accordance with this clause.
2.22 The Subcontractor shall keep on Site at all times a set of marked drawings showing deviations from
the working drawings, or other services including but not limited to main cable routes, trunking
runs, drain pipes for the purpose of issuing record drawings.
2.23 The Subcontractor warrants to the extent that the Subcontract Works have been or will be designed
by the Subcontractor that the Subcontract works are fit for the purpose for which it is intended. No
approval given by or on behalf of the Contractor or its agents, advisers or servants shall relieve the
Subcontractor of its obligations under this clause 2.23.
2.24 The Subcontractor shall deliver two sets of drawings of the completed Subcontract Works at
practical completion to the extent that the Subcontract Works have been or will be designed by the
Subcontractor and an electronic copy thereof in such format as specified in the Subcontract,
together with all operating and maintenance manuals for machinery, equipment and other items
(including but not limited to computer hardware, electronic equipment and computer software)
incorporated into the Subcontract Works.
2.25 The Subcontract Sum includes for any testing and commissioning of the Subcontract Works,
including by sections if appropriate, in accordance with the requirements of the specification and/or
all applicable statutory requirements and codes of practice, and for the provision of all related
documentation in connection with such testing and commissioning. The Subcontract Sum includes
for all test equipment, rigs and other such equipment necessary to carry out testing and
commissioning in accordance with this Subcontract. The Subcontractor shall provide to the
Contractor all test documentation, including test certificates, operating and maintenance manuals
(O&M manuals) and two sets of marked up drawings indicating the extent of each test.
2.26 The Subcontractor shall be responsible for taking its own site dimensions for the Subcontract Works,
checking runs and levels and marking out for builder’s work and for obtaining all information
necessary to carry out the Subcontract Works.
2.27 The Subcontractor shall move plant and equipment, materials and goods and free issue materials
within the Site, from time to time, as instructed by the Contractor at the Subcontractor’s expense.
2.28 The Subcontractor shall not be entitled to any addition to the Subcontract Sum nor to claim,
whether as damages or otherwise or any additional payment by virtue of others working on the Site
during the performance of the Subcontract Works nor if the Contractor alters the sequence of work
or arrangements for access (unless such alterations effectively prevent or hinder the Subcontractor
from performing his obligations).
2.29 Title to and property in any goods or materials brought on to the Site by the Subcontractor shall
vest in the Contractor (or such third party as the Contractor may designate) upon delivery and safe
unloading at the Site by the Subcontractor.
2.30 Notwithstanding any vesting in the Contractor or third party, the Subcontract Works and any
materials or goods on Site for incorporation into or for use in connection with the Subcontract
Works shall until practical completion be at the risk of the Subcontractor and any loss or damage to
the Subcontract Works or materials or goods shall be made good by the Subcontractor at its own
expense save where such loss or damage is caused by the negligent act error or omission of the
Contractor, its servants or agents.
2.31 In the event of a dispute between Contractor and the Employer or a third party involving issues
arising out of or connected with the Main Contract Works (including but not limited to any extension
of time applications made by the Contractor to the Employer), the Subcontractor shall provide all
reasonable assistance, information, co-operation and documents requested by Contractor in
relation thereto within such timeframe specified by Contractor as may assist the Contractor.
Contractor’s obligations
3.1 The Contractor shall comply with the CDM Regulations, shall provide sufficient access to the Site for
the Subcontractor to perform its obligations under this Subcontract and shall in no way hinder or
prevent the Subcontractor, whether by act or omission, from performing such obligations.
Notice and Observation of the Main Contract
4.1 The Subcontractor shall be deemed to know the provisions of the Main Contract insofar as they
apply to the Subcontract Works (other than details of the Contractor’s pricing). The Contractor shall,
if so requested by the Subcontractor, provide to the Subcontractor a copy of the Main Contract
(omitting details of the Contractor’s pricing).
4.2 The Subcontractor shall carry out and complete the Subcontract Works so that no act or omission
of the Subcontractor will result in any breach of contract by the Contractor.
4.3 The Subcontractor shall perform the obligations and assume the liabilities of the Contractor under
the Main Contract to the extent that such obligations and liabilities relate to the Subcontract Works
(insofar as they relate to and are applicable to the Subcontract Works or any part thereof) provided
that if any conflict arises between the provisions of the Main Contract and this Sub Contract then
this Subcontract shall prevail.
4.4 The Subcontractor shall notify the Contractor forthwith of any discrepancies or conflicts between
the Main Contract and the Subcontract of which it becomes aware.
4.5 The Contractor may issue written or oral directions in accordance clause 6.1 to resolve any
discrepancy or conflict between the Main Contract and the Subcontract.
Commencement and completion
5.1 The Subcontractor shall immediately commence the Subcontract Works on Site on receipt of the
Contractor’s written direction to commence the Subcontract Works.
5.2 Subject to the provisions of clause 8.1 to 8.5, the Subcontractor shall:
5.2.1 proceed with the Subcontract Works regularly and diligently and reasonably in accordance
with the progress of the Main Contract Works; and
5.2.2 achieve practical completion of the Subcontract Works within the Period for Completion.
5.3 The Contractor shall be entitled without prejudice to any other rights and remedies under this
Subcontract to take whatever measures it deems necessary in its sole discretion (including
supplementing the Subcontractor’s supervision, labour and resources) under the Subcontract
without the Contractor incurring any liability to the Subcontractor by giving notice to the
Subcontractor at any time if:-
(a) the Subcontractor fails to proceed regularly and diligently with the Subcontract Works; or
(b) the Subcontractor without reasonable cause wholly or substantially suspends the carrying
out of the Subcontract Works; or
(c) the Subcontractor fails to provide adequate supervision, labour and resources for the
Subcontract Works;
(d) the Subcontractor refuses or neglects to comply with a direction from the Contractor; or
(e) the Subcontractor refuses to comply with a Variation from the Contractor.
5.4 The Subcontractor shall indemnify Contractor against all liability, loss, damages, charges, costs and
expenses (including legal expenses) incurred or paid by the Contractor as a result of or in connection
with measures taken by the Contractor in accordance with clause 5.3.
5.5 The Contractor shall determine and notify the Subcontractor in writing of the date when the
Subcontract Works achieve practical completion and the Contractor will issue a Certificate of
Practical Completion stating the date that the Subcontract Works achieved practical completion.
The Contractor will not issue a Certificate of Practical Completion for the Subcontract Works until
the Contractor is satisfied that the Subcontract Works are practically complete and that:
(i) the Subcontractor provides evidence of the satisfactory completion of all testing and
commissioning required under the Subcontract or as requested by the Contractor;
(ii) the Subcontractor provides all test certificates, information and/or documentation
requested by the Contractor;
(iii) the Subcontractor provides all Operating and Maintenance manuals;
(iv) the Subcontractor provides two sets of marked up drawings indicating the extent of each
tests;
(v) the Subcontractor provides two sets of drawings of the Subcontract Works (to the extent
that any or all of the Subcontract Works have been designed by the Subcontractor)
(vi) completion by the Subcontractor of all defects, shrinkages and other faults to the
Contractor’s satisfaction;
(vii) execution of any deeds of warranty;
(viii) execution of any bonds and/or undertaking; and
(ix) any other requirements, criteria or conditions precedent that need to be satisfied prior to
the issue a Certificate of Practical Completion by the Contractor as set out in the Numbered
Documents.
5.6 The Contractor may notify the Subcontractor of any defects, shrinkages and other faults that appear
in the Subcontract Works during the defects liability period of the Main Contract Works and the
Subcontractor shall, at the Subcontractor’s expense, make good such defects, shrinkages and other
faults forthwith where it is an emergency and/or in any event no later than 2 days from notification
where it is not an emergency as advised by the Contractor. In the event that the Subcontractor
refuses or fails to make good such defects, shrinkages and other faults within the timescale stated
within this clause 5.6, then Contractor may employ and pay other persons to carry out whatever
remedial works are required to make good such defects, shrinkages and other faults and all costs
incurred by the Contractor shall be due to the Contractor as a debt from the Subcontractor and/or
the Subcontract Sum shall be reduced accordingly.
5.7 The Subcontractor shall make good forthwith at his own costs and in accordance with any direction
of the Contractor all defects, shrinkages and other faults in the Subcontract Works or in any part of
them due to materials, goods or workmanship not in accordance with this Subcontract. In the event
that the Subcontractor refuses or fails to make good such defects, shrinkages and other faults within
the timescale stated within this clause 5.7, then Contractor may employ and pay other persons to
carry out whatever remedial works are required to make good such defects, shrinkages and other
faults and all costs incurred by the Contractor shall be due to the Contractor as a debt from the
Subcontractor and/or the Subcontract Sum shall be reduced accordingly.
Contractor’s directions
6.1 The Contractor may issue written or oral directions which the Subcontractor shall forthwith carry
out.
6.2 If any directions are given orally, they shall within 2 working days be confirmed in writing by the
Contractor.
6.3 Except as provided in clause 7.1 to 7.5, the Subcontractor shall not be entitled to any additional
payment in respect of the Contractor’s directions.
6.4 If after receipt of a written notice from the Contractor requiring compliance with a direction, the
Subcontractor does not comply, then the Contractor may employ and pay other persons to carry
out the work and all additional costs incurred shall be due to the Contractor from the Subcontractor
as a debt.
Variations
7.1 The Subcontractor shall carry out any variation of the Subcontract Works that is directed in writing
by the Contractor (‘Variation’).
7.2 Variations shall be valued by the Contractor on a fair and reasonable basis, with reference, where
available and relevant, to rates and prices in the Pricing Documents.
7.3 Subject to clause 7.4, the Subcontractor shall be paid any direct loss and/or expense incurred by the
Subcontractor due to the regular progress of the Subcontract Works being affected by compliance
with any Variation. The Contractor shall determine the fair and reasonable amount of that direct
loss and/or expense.
7.4 It shall be a condition precedent of the Subcontractor’s entitlement to payment under clause 7.3
for any direct loss and/or expense, that the Subcontractor notifies the Contractor of such direct loss
and/or expense as soon as is reasonably practicable and the Subcontractor provides the Contractor
with all information, documents, invoices, accounts, costs and expenses requested by the
Contractor.
7.5 No variation to the Subcontract shall be binding unless it is recorded in writing and it is agreed
between the authorised representatives of Contractor and the Subcontractor. No variation shall
vitiate this Subcontract.
Extension of Time
8.1 If it becomes apparent that the Subcontract Works will not be completed within the Period for
Completion stated in the Subcontract (or any revised Period for Completion fixed in accordance
with the provisions of this clause 8.1) the Subcontractor shall forthwith notify the Contractor.
Where that delay occurs for reasons beyond the control of the Subcontractor, including compliance
with Variations in accordance with clause 7.1 that are not occasioned by a breach of contract or a
default of the Subcontractor, the Contractor shall grant such extension of time (if any) as is
reasonable. Reasons within the control of the Subcontractor include any breach of contract or
default of the Subcontractor or of others employed or engaged by or under it for or in connection
with the Subcontract Works or default of any supplier of goods or materials for the Subcontract
Works.
8.2 The Subcontractor shall constantly use its best endeavours to prevent or minimise any delay in the
progress of the whole or any part of the Subcontract Works.
8.3 It shall be a condition precedent to the Subcontractor’s entitlement to any extension of time under
clause 8.1, that the Subcontractor shall comply with the notification requirement in clause 8.1 and
that the Subcontractor shall provide such further supporting information as reasonably necessary
to justify its claim within 7 days of such notification including such information as the Contractor
may reasonably request following notification in accordance with clause 8.1, including but not
limited to causation and effect on the Subcontractor’s programme/s, labour, plant and materials,
resource schedules and critical path analysis programmes. For the avoidance of doubt, the
Contractor may request such information after the 7 day period.
8.4 If the Subcontractor fails to comply with clauses 8.1 to 8.3, then it shall waive its right, both under
the Subcontract and at common law, in equity and/or to pursuant to statute to any entitlement to
an extension of time under clause 8.1.
8.5 The Subcontractor shall not be entitled to claim any reimbursement for any direct loss and/or
expense and/or any damages in connection with clause 8.1, where the reasons giving rise to the
application have been caused or contributed to by any negligence, default or breach of this
Subcontract by the Subcontractor and/or the Subcontractor’s personnel or agents or to the extent
of any failure by the Subcontractor and/or the Subcontractor’s employees or agents to take all
reasonable care and proper steps to mitigate the impact of any delay to the Subcontract Works.
Damages for Failure to Complete the Subcontract Works within the Period for Completion
9.1 If Subcontractor fails to achieve practical completion of the Subcontract Works within the Period
for Completion stated in the Subcontract or any later Period for Completion fixed under clauses 8.1
to 8.5, the Subcontractor shall pay or allow the Contractor any direct loss and/or expense and/or
any damages incurred by the Contractor as a consequence of the failure of the Subcontractor to
achieve practical completion within the Period for Completion stated in the Subcontract or any later
Period for Completion fixed under clauses 8.1 to 8.5.
9.2 The Contractor may either deduct any direct loss and/or expense and/or any damages incurred by
the Contractor from any monies due to the Subcontractor under this Subcontract (provided that
notice of that deduction has been given in accordance with the Subcontract) or any other contract
between the Contractor and the Subcontractor or recover any loss and/or expense and/or any
damages from the Subcontractor as a debt whether in relation to this Subcontract or any other
contract between the Parties.
VAT
10. The Subcontract Sum is exclusive of VAT and in relation to any payment to the Subcontractor under
this Subcontract, the Contractor shall in addition pay the amount of any VAT properly chargeable in
respect of it.
Construction Industry Scheme (CIS)
11. The obligation of the Contractor to make any payment under this Subcontract is subject to the
provisions of the Construction Industry Scheme under the Finance Act 2004 or any subsequent
revisions thereof.
Payments – due dates and amounts
12.1 The Contractor shall pay the Sub-Contractor the Sub-Contract Sum (together with any proper
adjustments) for carrying out the Sub-Contract Works in accordance with either clause 12.2 or 12.3
below (whichever is applicable).
12.2 Where it is stated in the Order that the period for completion is less than 45 working days the Sub-Contractor shall not be entitled to receive any stage or interim payments and any such stage or
interim payments shall be entirely at the Contractor’s discretion and dealt with in line with clause
12.3.
12.3. Where it is stated in the Order that the period for completion is 45 days or more :-
12.3.1 The Sub-Contractor shall be entitled to interim payments in accordance with the Schedule
of Dates for Payment attached hereto, up to the date of practical completion.
12.3.2 The amount of each interim payment shall be the aggregate of the value of all work
properly performed and all other sums properly incurred from the date of commencement of the
Sub-Contract Works up to the applicable due date calculated in accordance with these terms and
conditions LESS the aggregate sum of the amounts paid or due to be paid in all previous interim
payments and any other sums which the Contractor may be entitled to deduct or claim under these
terms and conditions or otherwise.
12.3.3 The Sub-Contractor shall submit a fully detailed application for payment to the Contractor
not less than 7 calendar days before each due date identifying the value of the Sub-Contract Works
completed at the date of submission and all sums properly projected to be due up to the relevant
Due Date.
12.3.4 An application submitted in accordance with sub-clause 12.3.3 is not eligible to become a
default payment notice unless: a) it provides full details of the net sum due and the basis upon
which it has been calculated b) it is submitted no later than 7 days before the due date; and c) the
Sub-Contractor can provide evidence that it was actually received by the Contractor.
12.3.5 Within 5 calendar days of each due date the Contractor may give a payment notice to the
Sub-Contractor specifying the amount of the interim payment to be made and the basis on which
such amount is calculated (a “Payment Notice”). If the Contractor fails to issue a Payment Notice
in time the application will become the payment notice by default only where it complies with
clause 12.3.4. Otherwise a compliant default payment notice will need to be issued by the Sub-Contractor and the final date for payment will be postponed by the same period that the default
notice is issued beyond 5 days after the due date.
12.3.6 The final date for payment is 30 days after the due date for payment, in accordance with
the Schedule of Dates for Payment attached hereto.
12.3.7 If the Contractor intends to pay less than the amount stated in a Payment Notice (or any
form of default payment notice) then the Contractor shall give a pay less notice to the Sub-Contractor not later than 1 day before the final date for payment for that payment specifying the
revised amount of the interim payment to be made and the basis on which such amount is
calculated.
12.3.8 If the Contractor issues a Payment Notice later than the date required under clause 12.3.5
or a compliant default payment notice exists then provided the Payment Notice complies with the
requirements of clause 12.3.5 (save as to timing) it shall be deemed to be a pay less notice.
12.3.9 All interim payments shall be on account, shall be subject to adjustment and review
following completion of the Sub-Contract Works and shall not signify any approval by the Contractor
of workmanship or materials.
12.3.10 If the Sub-Contractor remains entitled to interim payments following the last of the due
set out in the original Schedule of Dates, the Schedule of Dates shall be deemed to be extended to
include such subsequent due dates as are consistent with, and by reference to the periods within,
the original Schedule of Dates.
Payment – final date and notices
13.1 Within 3 months of the date of completion of the Sub-Contract Works the Sub-Contractor shall
submit an account representing the total value of the Sub-Contract Works carried out by the Sub-Contractor and calculated in accordance with the Sub-Contract for ascertainment of the value of
the Sub-Contract Works by the Contractor.
13.2 The Sub-Contractor’s account shall contain such details as the Contractor may reasonably require
in order to properly ascertain the value of the Sub-Contract Works and calculate the final payment.
13.3 The due date for the final payment shall be 3 months after the Sub-Contractor submits an account
to the Contractor in accordance with clause 13.1.
13.4 The Contractor shall notify the Sub-Contractor of its ascertainment of the value of the Sub-Contract
Works within 5 days of the due date. This shall be the Final Payment Notice.
13.5 The final date for payment is 30 days after the due date for payment.
13.6 If the party by whom the final payment is stated to be payable intends to pay less than the amount
stated in the Final Account then that party shall give a pay less notice not later than 1 day before
the final date for payment for that payment specifying the revised amount to be paid and the basis
on which such amount is calculated.
13.7 If the Sub-Contractor fails to submit an account within 3 months of the date of completion of the
Sub-Contract Works the Contractor may within 6 months of the date of completion of the Sub-Contract Works value the Sub-Contract Works from the information then in its possession and notify
such valuation to the Sub-Contractor and if the Sub-Contractor does not dissent from the
Contractor’s valuation within 1 month of its submission to the Sub-Contractor the Contractor’s
valuation shall have effect in any proceedings under or arising out of or in connection with the Sub-Contract as conclusive evidence that any necessary effect has been given to all the terms of this
agreement.
Suspension
14.1 If the Contractor fails to pay the sum payable in accordance with clause 13.1 to 13.9 to the
Subcontractor by the final date for payment, then the Subcontractor may give a written notice of
its intention to suspend the performance of its obligations under this Subcontract. If the
Contractor’s failure to make payment continues for 7 days after the giving of such notice, then the
Subcontractor may suspend performance of any or all of those obligations until payment is made in
full. If pursuant to this clause 14.1 the Subcontractor intends to suspend only part of its obligations
under this Subcontract, then its notice required under this clause 14.1 shall state the specific
obligations the Subcontractor intends to suspend and those that it does not intend to suspend.
14.2 Where the Subcontractor exercises its right of suspension under clause 14.1, it shall be entitled to
a reasonable amount in respect of costs and expenses reasonably incurred by it as result of the
exercise of the right.
14.3 Applications in respect of any such costs and expenses shall be made to the Contractor and the
Subcontractor shall with its application or on request submit such details of the costs and
expenses as are reasonably necessary to enable its entitlement to be ascertained.
Insurance
15.1 The Subcontractor shall maintain, unless otherwise agreed by the Contractor, Public Liability
insurance cover whose value shall not be less than Five Million Pounds (£5,000,000), Employer’s
Liability Insurance cover, and Professional Indemnity Insurance cover with an aggregate limit of not
less than Five Hundred Thousand Pounds (£500,000) for all claims arising from any one incident and
in any one insurance period.
15.2 Should the Subcontractor not have these minimum levels of insurance cover, it should immediately
advise the Contractor who may at its sole discretion take out and maintain such cover on behalf of
the Subcontractor for the duration of the Subcontract works and for such longer periods as the
Contractor may deem appropriate and deduct the cost of doing so from any sums otherwise due
and which fall due to be paid to the Subcontractor or treat them as a debt due from the
Subcontractor to the Contractor.
15.3 The Subcontractor shall maintain its Professional Indemnity Insurance cover for a period of twelve
years after practical completion of the Subcontract Works, unless otherwise agreed by the
Contractor, and the Subcontractor shall when requested by the Contractor and upon giving
reasonable notice to do so provide documentary evidence to the Contractor that this insurance is
being properly maintained.
Termination
16.1 The Contractor shall be entitled to terminate the Subcontractor’s employment under this
Subcontract in respect of all or part of the Sub Contractor’s employment by giving written notice to
the Subcontractor without any liability on the part of the Contractor arising.
16.2 The Contractor shall be entitled to terminate the Subcontractor’s employment under the
Subcontract without liability to the Subcontractor by giving notice to the Subcontractor at any time
if:-
(a) the Subcontractor fails to proceed regularly and diligently with the Subcontract Works; or
(b) without reasonable cause wholly or substantially suspends the carrying out of the
Subcontract Works; or
(c) refuses or neglects to comply with a direction from the Contractor; or
(d) refuses to comply with a Variation from the Contractor; or
(e) the Subcontractor (being an individual) is declared bankrupt or makes any voluntary
arrangement with its creditors (within the meaning of the Insolvency Act 1986) or (being a
company) becomes subject to an administration order, a voluntary arrangement or goes
into liquidation (otherwise than for the purpose of amalgamation or reconstruction) or;
(f) an encumbrancer takes possession, or a receiver is appointed, of any of the property or
assets of the Subcontractor; or
(g) the Subcontractor ceases, or threatens to cease, to carry on business; or
(h) the Subcontractor ceases or threatens to cease to carry out the Subcontract Works; or
(i) the Subcontractor becomes Insolvent; or
(j) the Subcontractor is in breach of its obligations under this Subcontract; or
(k) the Contractor reasonably apprehends that any of the events mentioned above is about to
occur in relation to the Subcontractor and notifies the Subcontractor accordingly.
16.3 In the event that the Subcontractor’s employment under the Subcontract is terminated in
accordance with clauses 16.1 and 16.2, the Subcontractor shall immediately leave the Site and the
Contractor shall be entitled to recover from the Subcontractor the amount of any resultant loss,
damage and/or expense incurred by the Contractor as a result of the Subcontractor’s employment
being terminated in accordance with clause 16.1 and/or clause 16.2.
16.4 Upon the termination of the Sub Contractor’s employment under clause 16.2, the Contractor may
take possession of the Subcontractor’s plant and equipment, goods, and other things whatsoever
brought onto the Site by the Subcontractor and may use them for the purposes of executing,
completing and maintaining the Subcontract Works. The Subcontractor shall at no time bring any
materials, equipment, plant, appliances and other things of his whatsoever onto the Site unless the
above right has been reserved to the Contractor in respect of all and each of them. Further the
Subcontractor shall, if required by the Contractor, assign to the Contractor without payment the
benefit of any agreement for the supply of materials, equipment, plant, appliances or other things
or work to be done and shall ensure prior to the commencement of the Subcontract and as may be
required from time to time that such benefits can be so assigned.
Settlement of disputes
17.1 Either Party may at any time refer any dispute or difference arising under this Subcontract to
adjudication in accordance with the provisions of Part 1 of the Schedule to The Scheme for
Construction Contracts (England and Wales) Regulations 1998.
17.2 The adjudicator nominating body shall be: TECBAR.
17.3 The Referring Party shall pay the nomination fee for the appointment of the Adjudicator.
17.4 This agreement and any dispute or claim arising out of or in connection with it or its subject matter
or formation (including non-contractual disputes or claims) shall be governed by and construed in
accordance with the law of England and Wales.
Governing Law
18.1 This Subcontract is governed by the Law of England and Wales and the English courts shall have
jurisdiction over any dispute or difference between the Parties which arises out of or in connection
with this Subcontract