Sub contracting on a JCT contract

Discussion in 'Builders' Talk' started by Nicholas Weatherley, Oct 2, 2021.

  1. Nicholas Weatherley

    Nicholas Weatherley New Member

    Anybody aware if this is illegal/contract breaking given that the JCT clearly says you cannot sub-contract (ie plumbing work) unless agreed with the clients (which would become I guess a sub-contract JCT)?
    I am wondering what the penalties for this would be.
    I would really appreciate any advice on this.
     
  2. jonathanc

    jonathanc Guest

    Unlikely to be any issue unless there is a material breach resulting in non performance under the contract. Post an extract of the restriction on subcontracting from jct
     
  3. Nicholas Weatherley

    Nicholas Weatherley New Member

    Hi Jonathanc - under The conditions (e) Not sub contract any of the work without the customers permission.
    The project is 14 weeks behind. I agreed an extension until 6th Setptember from that point i could legally terminate the contract if I wanted.
     
    Last edited: Oct 2, 2021
  4. stevie22

    stevie22 Screwfix Select

    I can't see a sound reason for the client not to allow subcontracting if he's even aware of the terms in detail.

    You would be responsible under the contract anyway so you would need to be back to back with your subbies.

    Whether or not you could simply terminate depends on the circumstances of the delay.
     
  5. jonathanc

    jonathanc Guest

    You asked what the penalties are: it is a civil matter. The penalty is equal to the loss you suffer if subcontracting occurs: likely nothing
     
  6. Nicholas Weatherley

    Nicholas Weatherley New Member

    Issue is we did not know he was sub contracting.
     
  7. Nicholas Weatherley

    Nicholas Weatherley New Member

    We didnt know they were sub contracting as we would have vetted them for starters - the work has been poor and we are 16 weeks behind. If the penalty is equal to loss because of sub contracting I will be very happy. I am going to employ a domestic solicitor regardless and will keep everyone informed.
     
  8. jonathanc

    jonathanc Guest

    Are there any dispute resolution procedures in the contract? Have you followed them?

    No idea what a domestic solicitor is btw?
     
  9. WillyEckerslike

    WillyEckerslike Screwfix Select

    May we assume that you are the client Nicholas?
    A couple of points that may help (or not).
    1. I'm not sure what your subcontractor vetting process would involve but I have certainly seen circumstances where the subbies would not have passed thresholds for inclusion due to size of company, annual turnover, duration of incorporation and so on but the quality of their work was far in excess of the directly employed labour. The implication is that you vetted your contractor. What did that entail?
    2. There are solicitors who specialise in contract law. Your 'domestic' solicitor will possibly have to subcontract to one.
     
    Nicholas Weatherley likes this.
  10. jonathanc

    jonathanc Guest

    not to mention the solicitor may need to subcontract to a barrister and a litigation lawyer if it goes to court plus bailiffs if it comes to that.
     
  11. stevie22

    stevie22 Screwfix Select

    Nicholas: I read your post as you being main contractor but my comments at post 4 remain valid with he/you substitutions.

    Main contractors are never going to employ every trade they need so subcontracting to specialists is a fact of life and it would be implicit in the C of C that permission would not unreasonably be withheld.

    We don't know the works that you're undertaking, but if you're 16 weeks behind on the back of 1 trade then they're probably substantial?

    Do you not have an architect/designer or other pro dealing with the contract rather than seek opinions from a random bunch of keyboard warriors?

    Resist going to law if you possibly can!!
     
  12. Nicholas Weatherley

    Nicholas Weatherley New Member

    Hi Jonathan - yes you can go to dispute resolution/adjudication if you want but no set procedure within the contract. I guess we are way past that stage now.
     
  13. jonathanc

    jonathanc Guest

    I expect if you follow a legal route then the first stage in the builder defending themselves is that you are not acting reasonably by using the dispute procedures. Not saying the rights and wrongs but I can see an argument being madeā€¦
     
  14. Mr Rusty

    Mr Rusty Screwfix Select

    The answer is always "what the contract says". IMHO it is unlikely there is much of a remedy for subcontracting. As it's the "norm", it would be very difficult to substantiate an actual loss purely because of subcontracting. So that leaves delay and termination. You need to be very clear who is entitled to what if the client terminates. You say they are behind - but on what basis? unless there is a formal milestone in the contract, if you have agreed extra time, it isn't behind. What is the remedy for delay? LAD's? Be careful, you may find that even if you think you are in the right, if you terminate, you might find you are not! Did you issue a formal start notice if the contract requires? without that, there have been cases where the outcome is you cannot enforce delay because the contract didn't actually start! Avoid litigation - the only winners are the lawyers.
     
    stevie22 likes this.
  15. Nicholas Weatherley

    Nicholas Weatherley New Member

    Thank you Mr Rusty.
    Absolutely. The contract has a - start date - finish date - A precise Gantt chart was included. The builder and ourselves signed and it was independently witnessed . We have had several meetings to discuss delays and to remedy this. Apart from being treated like a hospital case the last agreed date has again passed 5 weeks ago. 10 weeks ago I agreed to buy all the materials (I was sick of the delays and bull to be honest.I bought everything within two days - bricks/wood/the lot so his mark up went south with the geese.
    There is a simple remedy for subcontracting. We have a contract that says quite clearly no subcontracting unless the client/customer checks them out. Please dont reply saying that its okay/normal for the builder to do this as thats rubbish. It wouldnt be in a JCT if this wasnt an important issue. Actually there was a recent case where the use of non agreed contracting out cost a firm in London a lot of money.
    I guess in most non contract cases the client leaves such things to the builder. My argument is simply that I can clearly show that the use of sub - contracting has delayed work and cost me money. Incidentally as you havent vetted the sub contactors how do you know that the work isnt been carried out by cowboys rather than by qualified competent trades? Answer is you dont unless you ask the builder (at which point you find out he is sub contracting something he shouldnt have done regardless of whether the trades are qualified or not). Swapping sweathshirts between jobs doesnt constitute employment/qualification.
    As for costing money.....
    jonathanc said:
    You asked what the penalties are: it is a civil matter. The penalty is equal to the loss you suffer if subcontracting occurs: likely nothing.... (or ask Wimlmott Green construction they might disagree. That case is a good pointer of the principles of when a main contractor will, and will not, be liable for acts and omissions of its sub-contractors.

    I agree about the solicitor legal bit - nightmare but I wont be treated as a hospital case by the building company any more.
     
  16. Mr Rusty

    Mr Rusty Screwfix Select

    There are many reasons to want to vet sub contractors, but the fact is, even if this is a breach of contract, to claim damages you have to evidence actual loss - difficult.

    so there's a programme - so what. The important bit in the contract is where it says what happens if there is a delay to completion. A program is pretty toothless if you haven't also agreed LADs, without LADs, the only remedy is unliquidated (actual) damages, so, again, you have to evidence financial loss. This is almost impossible if the claim is only time on a domestic contract.

    By the way you are answering I suspect the contract is not that well drafted. Sorry to be so blunt, but you stand much more success by negotiating in good faith, than by the sounds of it, going legal/contractual.

    And BTW, a big part of my day job, is negotiating construction contracts (not so much JCT - usually MC's own or NEC), usually with the Tier 1 contractors.
     
  17. jonathanc

    jonathanc Guest

    And I presume by agreeing to buy materials you agreed a contract variation at that stage. Signed by both parties and witnessed. To be honest I would not expect a commercial contract to require a witness to signature

    as to subcontracting. My point remains that it is the prime contractor responsible for non performance and yes the remedy is the damages you have suffered.

    to be honest I suspect you would do well to terminate now it sounds like it is irrecoverable
     
  18. stevie22

    stevie22 Screwfix Select

    Do you have a professional on board? Since you haven't answered this previously raised point, I have a feeling you don't but have a little knowledge and that I fear is dangerous.

    Even with agreed LADs you would need to prove losses if it came to it. (Under ICE conditions at least and I very much doubt if JCT are different)
     
  19. Nicholas Weatherley

    Nicholas Weatherley New Member

    Thank you for all the advice and help. I will keep everyone posted.
    I admit to being a complete novice in this but luckily I knew someone who wasnt.
    In answer to Stevie's post - yes I do have a professional on board but was waiting for him to come back to me before responding and wanted his take on it.
    He has been ill so I havent been bombarding him with my concerns until now and basically just ranted to him over the phone on Friday evening (making me feel guilty as **** btw).
    In answer to Jonathan - yes I do - there is a section on variations - incidentally credit notes by the contractor have been a major pain in the ***. Surprising how his price and mine differ so widely for the same item from the same place - even taking into account his 20% mark up.
    I have also sought legal advice today and they believe our JCT is very good - it helped that the professional mentioned above is a project manager (for JP Morgan) who put this together.
    According to him - the contract (which was checked by the solicitor in his team) is watertight(This guy deals in multi million pound contracts so I believe him).
    Regardless. we will see. Since i mentioned possibly terminating the contract at my property in an e mail on Saturday to the contractor work today has been carried out by tradesmen who had their weetabix. Hopefuly they complete the work without anymore ******** and delays (love the one where he mailed me saying that the plumber and electrician both had covid and not on site this week - then bumping into them two hours later carrying a toilet into a house that the contractor was also working on). Boom.
     
  20. Mr Rusty

    Mr Rusty Screwfix Select

    methinks this is going to end badly.
     

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