JCT 2011 Building Sub-contracts

Peter Barnes MSc, FCIOB, FCIArb, MRICS is a Chartered Arbitrator, Registered Adjudicator, Accredited Mediator and Chartered Conservationist, and has been actively involved in the Construction Industry for over 40 years. Since moving into consultancy he has been appointed to act as Arbitrator, Adjudicator, Mediator, and as Expert Witness in respect of both Liability and Quantum issues. Peter is a member of the Consultants’ College for the JCT Council and sits on the JCT Council.Matthew Davies BSC (Hons), LLB (Hons), LPC is dual qualified as a Chartered Quantity Surveyor and Solicitor, with over 20 years of experience in the construction industry. He specialises in providing legal, commercial and contractual management, construction claims and dispute resolution services to the construction industry, including representing organisations in adjudication and other dispute forums. He also drafts and reviews contracts, sub-contracts and collateral warranties, and advises on a variety of contentious and non-contentious construction matters.

• Preface xiii1 Background and Introduction 11.1 The Joint Contracts Tribunal (JCT) 11.2 Sub-contracting 11.3 The formation of contracts and sub-contracts 21.4 Standard forms of contract and sub-contract 61.5 The JCT Sub-contracts dealt with within the chapters of this book 71.6 The JCT Sub-contracts not dealt with in the chapters of this book 102 The Sub-contract Agreement 172.1 Introduction 172.2 The structure of the sub-contract agreement 192.3 The recitals 202.4 The articles 222.5 The sub-contract particulars 232.6 Attestation forms 352.7 Schedule of information 372.8 Supplementary particulars 382.9 Equivalent sub-contract provisions 383 Definitions and Interpretations 443.1 Introduction 443.2 Definitions 443.3 Interpretation 453.4 Reckoning periods of days 463.5 Contracts (Rights of Third Parties) Act 1999 463.6 Giving of service of notices and other documents 463.7 Effect of the final payment notice (or the default payment notice) 473.8 Applicable law 493.9 Equivalent sub-contract provisions 494 Sub-contractors’ General Obligations 514.1 Introduction 514.2 General obligations 534.3 Sub-contractor’s design 594.4 Materials, goods and workmanship 714.5 Compliance with main contract and indemnity 754.6 Errors, discrepancies and divergences 764.7 Equivalent sub-contract provisions 805 Time 855.1 Introduction 855.2 Time and the adjustment to the period for completion 865.3 Practical completion and lateness 965.4 Equivalent sub-contract provisions 986 Defects, Design Documents and Warranties 1026.1 Introduction 1026.2 Defects 1036.3 Sub-contractor’s design documents 1076.4 Collateral warranties 1086.5 Equivalent sub-contract provisions 1137 Control of the Sub-contract Works 1147.1 Introduction 1147.2 Assignment and sub-letting 1167.3 Person-in-charge 1187.4 Access provided by the sub-contractor 1197.5 Opening up the works and remedial measures 1197.6 Attendance and site conduct 1237.7 Health and safety and CDM 1297.8 The CDM Regulations (i.e. the Construction (Design and Management) Regulations 2015) 1357.9 Suspension of the main contract by the contractor 1427.10 Benefits under the main contract 1467.11 Certificates/statements or notices under the main contract 1467.12 Equivalent sub-contract provisions 1478 Payment 1508.1 Introduction 1508.2 The amount due in respect of interim payments 1518.3 Unfixed materials 1528.4 The amount due in respect of the final payment 1538.5 Retention 1568.6 Payment due dates and final dates for payment for interim payments 1598.7 Payment Notices and Pay Less Notices for interim payments 1608.8 The payment due date and the final date for payment for the final payment 1628.9 Payment Notices and Pay Less Notices in respect of the final payment 1628.10 VAT (Value Added Tax) 1648.11 Construction Industry Scheme (CIS) 1648.12 Interest 1648.13 Sub-contractor’s right of suspension 1658.14 Fluctuations 1668.15 Equivalent sub-contract provisions 1679 Loss and Expense 1719.1 Introduction 1719.2 Can common law damages claims be excluded by the contract? 1739.3 Are claims for extensions of time and loss and/or expense linked? 1739.4 What are the grounds/requirements for loss and expense? 1749.5 What are Relevant Sub-contract Matters? 1749.6 Can the contractor recover direct loss and/or expense from the sub-contractor? 1769.7 In pursuing a loss and expense claim, what does a sub-contractor need to prove? 1779.8 What needs to be proved in a loss and expense claim document? 1799.9 What is a global claim? 1809.10 Common heads of a loss and expense claim 1829.11 Prolongation costs 1839.12 Disruption claims 1869.13 Winter working 1879.14 Head office overheads and profit 1879.15 Loss of profit 1909.16 Increased costs 1909.17 Cost of claim preparation 1919.18 Interest and finance charges 1919.19 Acceleration 1929.20 Common law damages 1939.21 Equivalent sub-contract provisions 19610 Variations 19710.1 Introduction 19710.2 What is a variation? 19810.3 How is a variation instructed? 19810.4 Can a variation vitiate a contract? 19910.5 Must a sub-contractor comply with all variation directions issued? 20010.6 Must a sub-contractor comply with all variation directions issued that may injuriously affect the efficacy of the sub-contractor’s design? 20010.7 What happens if a sub-contractor does not comply with a direction issued? 20110.8 How should variations be valued? 20110.9 How should variations that relate to a sub-contractor’s design work be valued? 20110.10 What is the procedure to be followed in respect of a schedule 2 quotation? 20210.11 What are the valuation rules? 20510.12 Equivalent sub-contract provisions 21011 Injury, Damage and Insurance 21411.1 Introduction 21411.2 Sub-contractor’s liability for personal injury or death 21511.3 The sub-contractor’s liability for injury or damage to property 21611.4 The sub-contractor’s liability for loss or damage to the sub-contract works 21711.5 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? 21811.6 What is the sub-contractor’s liability for damage to the sub-contract works? 21811.7 What are the employer’s options where terrorism cover is not available? 22011.8 Is the contractor responsible for damage caused to the sub-contractor’s plant, etc.? 22111.9 Is the sub-contractor required to take out professional indemnity insurance? 22111.10 When and how does the Joint Fire Code apply? 22211.11 Equivalent sub-contract provisions 22312 Termination of Sub-contract 22612.1 Introduction 22612.2 How can a contract come to an end? 22712.3 What can cause a sub-contract to be terminated? 22812.4 What is a breach of contract? 22812.5 Will any breach of contract enable one to terminate the sub-contract? 22812.6 What is a repudiatory breach at common law? 22912.7 Why have termination provisions in the contract if the sub-contract can be terminated at common law? 22912.8 What is the effect of a sub-contract being terminated at common law? 23012.9 Are the effects of a sub-contract being terminated under common law or by contractual provisions the same? 23012.10 Where can the contractual termination provisions be located in the Sub-contract? 23112.11 Are the party’s common law termination rights preserved under the Sub-contract? 23112.12 What reasons give the contractor a right to terminate the sub-contractor’s employment under the JCT Sub-contract Conditions? 23112.13 What is deemed to be default by the sub-contractor under clause 7.4.1 of SBCSub/D/C? 23112.14 What happens when a sub-contractor commits a specified default noted at clause 7.4.1 of SBCSub/D/C? 23212.15 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? 23312.16 What does insolvency of the sub-contractor mean? 23312.17 What happens when the sub-contractor becomes insolvent? 23412.18 What does corruption entail? 23512.19 What are the consequences of the contractor terminating the sub-contractor’s employment? 23512.20 What reasons give the sub-contractor the right to terminate his or her employment under the JCT subcontract conditions? 23712.21 What is deemed to be default by the contractor under clause 7.8.1 of SBCSub/D/C? 23712.22 What happens when a contractor commits a specified default noted under clause 7.8.1 of SBCSub/D/C? 23812.23 What does insolvency of the contractor mean? 23912.24 What happens when the contractor becomes insolvent? 23912.25 What are the consequences of the sub-contractor terminating his or her own employment? 24012.26 If a sub-contractor’s employment is terminated for any reason, can it subsequently be reinstated? 24212.27 Equivalent sub-contract provisions 24213 Settlement of Disputes 24513.1 Introduction 24513.2 Mediation 24513.3 Adjudication 24713.4 Arbitration 25313.5 Litigation 26013.6 Equivalent Sub]contract provisions 263Table of Cases 265Table of Statutes and Regulations 269Index 271