BEWARE "STARTING THE CLOCK ".
Starting work on a sub-contract
"sets the clock ticking" and the agreed on site working period
begins to elapse. At the end of that
period, if the sub-contractor’s works
are incomplete (and in the absence of a formal extension of time), he could be
liable to massive financial "damages" from the client and/or main
contractor. Contrary to the popular
misconception, there is no need to prove that the sub-contractor is “guilty” of
delay. On the contrary, the onus is
entirely upon the sub-contractor to request and demonstrate entitlement to an
extension of time. If he is unsuccessful in this regard, then the period of
sub-contract over-run will trigger off deduction of damages from payments
otherwise due under the sub-contract.
So, what are the "streetwise" angles on
"commencement? Most sub-contract
conditions provide for the main contractor to give written notice of one or two
weeks, instructing the sub-contractor as to
formal commencement date. Unfortunately,
this requirement is often ignored and the sub-contractor tends to drift
gradually onto site in a rather casual manner. In short, many
sub-contractors fail to realise the vital importance of establishing and
recording the actual date of their commencement on site and the eventual
achievement of practical completion and
just “let it happen”.
Building not ready? A
sub-contractor who commences on an
"unready" site puts himself at great disadvantage and risk! Having commenced, he will find himself "working out of sync" with the
other trades. Then, when the main
contractor finally "gets his act together"; the sub-contractor is accused of "delaying handover"!
A sub-contractor must
visit and inspect the site well in advance of the planned start date. If the site clearly will not be
"ready", then record it with the specific reasons, by writing to the
main contractor. Take photographs. Be
aware that "uneconomic working conditions" are not a valid reason for
delayed commencement. That aspect has
to be dealt with by way of subsequent extension of time and/or loss and expense.
If a deferment of site start
is mutually agreed, then record the agreement in writing, including the
date of the conversation and the name of the client’s or main contractor’s
representative involved and confirm the
sub-contractor’s entitlement to a
revised completion date (based upon the original agreed period commencing at
the new start date). Whether the
sub-contractor has to request an "extension" will depend on the
particular sub-contract conditions.
If the main contractor, despite the sub-contractor’s protests, still gives formal "notice to commence", then
(providing the site is safe for working), the sub-contractor probably has to
comply. Again, it all depends on the
precise sub-contract terms. If the
sub-contractor then finds himself "delayed from the start" (i.e. by
lack of access and/or building readiness etc), he will have to give a formal
delay notice as at "day one" and continue to do so for as long as the
delays continue.
The sub-contractor must also be aware that
the action of commencing work will usually denote “acceptance of conduct” of
the main contractor’s order and any terms and conditions attached thereto,
however onerous the latter may be. So,
if the sub-contractor is unhappy with any aspect of the main contractor’s order,
he should endeavour to resolve matters before commencing work. Afterwards is
too late!
Many sub-contractors of my acquaintance have
found, to their cost, that sending "two men and a dog" to do a couple
of days work on an unready site has subsequently been held to have
"started the clock ticking" (ie triggered off the sub-contract
period). So, do you refuse to
co-operate? Most certainly not! What the sub-contractor should do is to
cover himself with a nice polite letter which confirms that the sub-contractor’s action in visiting site for this pre-start
work is purely to assist the main contractor, is not to be construed as formal
commencement of the sub-contractor’s works
and is "without prejudice” to the sub-contractor’s contractual entitlements.
Similar advice applies to the recording of practical completion
of the sub-contract works. This latter
date is most important, since it places a stop limit to the further imposition
of damages for delay and denotes the commencement of the formal defects period.
Also, this is the time to request the release of the first half of the
sub-contractor’s retention monies. In
fact, Clause 14.1 of the most popular form of sub-contract (DOM/1) actually
states that if the sub-contractor submits his opinion in writing that he has
now achieved practical completion and the main contractor fails to state
otherwise within fourteen days, then practical completion shall be deemed to
have taken place on the date so notified.
In conclusion, the “streetwise subbie” should always take great
care to see that the actual
commencement date is clearly agreed and recorded in writing, and
likewise the actual date of practical completion. During his presence on site, all delays should be notified in
writing to the main contractor and, in the event of a likely over-run of the
original sub-contract period then an extension of time should be promptly
requested. These simple measures are well within the capability of any
reputable sub-contractor, and yet will
produce great benefits in terms of protection.
John Russell
Contracts and
Training Consultant
Cheshire CW4 7DP
Tel: 07770 986444
Email: swsubbie@globalnet.co.uk
“Contract law” column for Electrical Times –
published 1 Sept 05.