Contract Between Builder And Subcontractor Template for England and Wales

A Contract Between Builder And Subcontractor is a legally binding agreement that governs the relationship between a main contractor and a specialist subcontractor in construction projects. Under England and Wales law, this contract establishes clear terms for delegated work, ensuring both parties understand their obligations, rights, and responsibilities throughout the construction process.

When do you need this document?

You need this contract whenever you're engaging a subcontractor to perform specialist work on a construction project. This includes situations where electrical, plumbing, roofing, or other trades are required beyond your main contracting capabilities. The document is essential when the subcontracted work exceeds £1,000 in value, as it brings the agreement under the Construction Act 1996's payment and adjudication provisions. You also need this contract when working on projects where the employer requires proof of proper subcontractor arrangements, or when seeking to limit your liability for subcontracted elements while maintaining quality control.

Key legal considerations

The contract must clearly define the scope of works to prevent disputes over what is included or excluded from the subcontractor's responsibilities. Payment terms require careful attention, particularly regarding interim payments, retention amounts, and final account procedures, as these must comply with the Construction Act 1996's payment notice requirements. Insurance provisions are crucial, ensuring the subcontractor maintains adequate public liability, employer's liability, and professional indemnity coverage appropriate to the risk profile of the works. The agreement should address variations procedures, establishing how changes to the original scope will be priced and authorised. Quality standards and defects liability periods must be specified, along with remedies for non-compliance. Health and safety obligations under CDM Regulations 2015 should be clearly allocated, ensuring compliance with the Health and Safety at Work etc. Act 1974.

Legal requirements in England and Wales

Under England and Wales law, construction subcontracts must comply with the Housing Grants, Construction and Regeneration Act 1996, as amended by the Construction Act 2009. This legislation mandates specific payment procedures, including the right to interim payments, payment notices within five days of payment due dates, and the right to suspend performance for non-payment. The contract must incorporate adjudication procedures for dispute resolution, providing a statutory right to refer disputes to adjudication at any time. Payment terms cannot exceed 28 days unless there's express agreement otherwise, and pay-when-paid clauses are generally prohibited except in insolvency situations. The Supply of Goods and Services Act 1982 implies terms regarding reasonable care, skill, and quality of materials, which cannot be excluded for consumer contracts. Late Payment of Commercial Debts (Interest) Act 1998 provisions apply for statutory interest on overdue payments. The contract should consider the Contracts (Rights of Third Parties) Act 1999 implications, particularly if the employer needs direct rights against subcontractors.