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.