There was no agreement between the contractor and the subcontractor at the end of June 2016, but the Court found that, in practice, the parties acted as if there was a return clause and that the original not only approved all payments, but acted directly in front of the subcontractor to authorize the work. The Court found that the payment to the subcontractor depended on the receipt of the payment by the ordermaster. In the case of a back-to-back system, a dispute between the employment master and the employer should have a significant impact on the relationship between the principal contractor and the subcontractor, and vice versa. While the back-to-back principle is relatively direct and in itself undisputed, in practice problems often arise because of the way different contracts are documented. Poorly developed contracts can be difficult to interpret and inevitably lead to tedious and costly quarrels. There are a number of standard sub-council agreements that comply with advisory agreements, such as the RIBA Sub-Advisor Agreement and the ACE Sub-Council Agreement. The new 2020 edition of the RIBA Subconsultant Professional Services Contract has been updated to meet the revised RIBA`s work order. We also took the opportunity to review and revise some of the standard clauses, following feedback from contract users and construction lawyers, to make them clearer and more understandable. In addition, we have made the following changes: In many cases, cooperation between contractors and subcontractors is done without agreement or agreement without legal advice (including by the subcontractor).
Given the complexity of the relationship, where there is another factor (the client) in the image, it is even more important than usual to call a lawyer who has specialized in this area from the pre-contract phase, but certainly because there is a late payment. The senior advisor may want to ensure that he has recovered clauses in his own advisory agreement and in the sub-council agreement, so as not to be exposed. Negotiation is not always linear and the best is to develop and agree on advisory and advisory agreements simultaneously. The sub-advisory agreement should cover issues such as the transfer of copyright to the senior advisor and the date of payments, so that the senior advisor`s cash flows from his or her own payments are reasonable and can meet the requirements of the Housing Subsidies, Construction and Recovery Act, which would allow a sub-advisor to suspend the benefit in the event of non-payment. For many construction projects, the contractor enters into a contract with a contractor for all the work and the contractor then enters into subcontracts for part of the work. The subcontractor`s agreements often contain a back-to-back clause. The importance of a “back-to-back” clause is that the agreement between the principal contractor and the subcontractor depends on the agreement between the initial customer and the principal contractor and that, as a general rule, the original client is the only one to confirm the work and that the payment and payment of the principal contractor to the subcontractor depend on the receipt of the payment by the principal contractor. The principal contractors should obtain the consent of the client to hire subcontractors before attempting to enter into back-to-back contracts.
Under the contract itself, the principal contractors should cede responsibility for their share of the work to the contractor. The term “back-to-back” refers to the replication of contractual conditions in the supply chain. In this newsletter, we discuss the main reasons why return contracts can be particularly controversial and the main editorial issues that need to be considered and addressed in order to minimize the risk of litigation.