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Does your subcontract expose you to high risk?

By Geoff Hardy - 30 May 2019

Cashflow is the very life blood of most industries. None more so than the construction industry. However, despite changes to building laws, multiple failures in recent months have shown that many subcontractors still struggle to get paid.

While most large construction projects require a subcontractor to sign a standard form subcontract, smaller outfits may not do this. This may be because they lack the knowledge or resources to manage these subcontracts. An absence of paperwork to back up claims can lead to serious issues down the track if things go wrong.

While it is important to have a written subcontract, you should also be careful what you agree to. There are often terms and conditions in these contracts which, if ignored, stop reliance on tender documents and can include strict payment claim deadlines, cash flow restricting payment times and retentions. In particular, the SA-2017, which is a common subcontract in construction projects, is around 51 pages and is filled with complex provisions.

If that isn't bad enough, you might not even be shown the contract between the principal and main contractor until it is too late. This could mean exposure to higher risk than the subcontract allows.

If you're a subcontractor and are worried about subcontract documentation, or have an issue relating to one, contact Geoff Hardy or any member of our construction team today.


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