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Sub-Contracts

petersolomon3 English

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Sub-Contracts

  1. Reasons for their use

    • SMM in 1922 contained 16 different trades
      • 1988 edition contains over 300
    • Affords flexibility for the main contractors
    • Main Contractor still wholly liable to Employer
    • No privity of contract between Employer and SC
      • Note that some Employers may influence or insist on a SC
  2. Liability of SC to Emploers

    • Collateral warranty
      • Shanklin Pier v. Detel Products
    • No claim in pure economic loss
      • this is no longer very clear
        • Junior Books v. Veitchi
          • sufficiently close relationship
          • The same could occur in negligent misstatement if the relationship were sufficiently proximate
            • Hedley Byrne v Heller
    • The main contractor can discharge his liability if he is careful in the selection of the SC
      • D&F Estates v. Church commissioners
  3. Relationship

    • Nominated selected by the Employer
    • Domestic selected by the Contractor
      • Named SC - species of the JCT form
        • Avoids the disadvantages associated with nomination
  4. Incorporation of contract terms

    • Not uncommon for their to be no Contract
      • Modern Building v. Limmer & Trinidad
        • Held that the expression on the acceptance letter meant the 'green book'
        • Although this should be contrasted where the Arbitration clause was deemed not to be included
          • T.W. Thomas v Portsea Steamship
  5. Incorporation of main terms

    • Can be ambiguous if referring to the main contract
      • Geary, Walker v. Lawrence & Son
    • Delay
      • Martin Grant v. Sir Lindsay Parkinson
        • Argued that work of the SC should be free to arrange in an efficient and profitable manner
  6. Dispute resolution

    • A probable inclusion although a dispute with the SC could be passed up to the Employer. These would both be heard separately
      • Tripartite arbitration
  7. Name borrowing

    • Northern Regional Health Authority v. Derek Crouch Construction
      • Concerned with whether the court could open up an appeal from an Adjudicator. Held not to.
        • Although Beaufort Development v. Gilbert Ash - they can
  8. Witholding payment, set off and abatement

    • Only if very cleaar
      • Beaufort Development v. Gilbert Ash
        • HGCRA
          • Section 111 notice is required
            • SL Timber systems v. Carillion Construction
          • The wide rule of the notice is held to promote cashflow
            • Pay no argue later - this has risks associated with liquidation
    • Pay when paid
      • Section 111 prohibits this
        • Midland expressway v. Carillion Construction - CAMBBA
    • Employer has control mechanisms in the JCT to prohibit the amount of works sub-let.
  9. Assignment

    • Can freely assign rights unless prohibited
      • Linden Gardens v. Lanesta Sludge
  10. Employer liability to SC

    • No implied right of payment for nominated SC
      • Has to be incorporated
        • JA Milestone v. Yates Castle Brewery
    • No right to direct SC

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Mind Map on Sub-Contracts, created by petersolomon3 on 07/05/2013.
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