Air Conditioning Design Ltd CONDITIONS OF SUB-CONTRACT (02 December 2022)
1. Definitions:
Contractor: Air Conditioning Design Ltd
Main Contract: The contract between the Contractor and its client.
Purchase Order : The written instruction issued by the Contractor to the Sub-Contractor to carry out the Sub-Contract Works.
Sub-Contract Works: As described on the Purchase Order and / or Letter of Appointment.
The Sub-Contract comprises the Purchase Order, these conditions, the Letter of Appointment and any documents referred to therein.
2. The Sub-Contract is the entire agreement between the parties and any other document, representation or discussion shall have no effect.
3. The Sub-Contractor may not assign the benefit of the Sub-Contract or any entitlement under it without the prior written consent of the Contractor.
4. The Sub-Contractor shall provide everything necessary to carry out and complete the Sub-Contract Works including all material, labour, plant, equipment, storage and transport. The Sub-Contractor is deemed to have examined the drawings, the site and specification and has allowed for any risk, contingency or other circumstances that could affect the cost or time required for the Sub-Contract works. The Sub-Contractor has no entitlement whatsoever arising from any lack of knowledge.
5. Subject to any variation these Conditions form part of the Sub-Contract to the exclusion of all other terms and conditions (including any terms or conditions which the Sub-Contractor purports to apply under any purchase order, quotation, confirmation of order, specification, or other document). In the event of any discrepancy or conflict within or between these Conditions and any other Conditions incorporated into the Sub-Contract the Contractor shall decide between the discrepant terms. The Sub-Contractor shall comply with the decision of the Contractor on any discrepant terms without any entitlement to extension of time or additional payment.
6. All materials and workmanship shall be to the standard or specification described in the Sub-Contract and if not so described shall be to a standard appropriate for the Sub-Contract works as agreed in writing by the Contractor.
7. The Sub-Contractor is deemed to have allowed in its tender for complying with the Main Contract Conditions and shall observe, perform and comply with all provisions of the Main Contract so far as they relate to the Sub-Contract Works as if they were specifically set out herein. The Sub-Contractor has no entitlement whatsoever arising from any failure to make such allowances in its tender. The Sub-Contractor will carry out the Sub-Contract works so that the Contractor is not in breach of any of its obligations under the main contract and will provide notices and details to the Contractor at such time and in such detail to allow the Contractor to comply with all of its obligations to provide notices and details under the main contract. The Sub-Contractor shall indemnify the Contractor from all costs or losses whatsoever caused by any failure of the Sub-Contractor to comply with this clause.
8. The Sub-Contractor shall comply with all statutes, other legislation and bylaws insofar as they affect the Sub-Contract Works and such compliance will not entitle any additional payment to the Sub-Contractor or an extension of time.
9. The Sub-Contractor will make good at its own cost all defects which are notified by the Contractor no later than 14 days after the expiry of the Defects Liability Period and will make good such defects in such manner and at such times so as to cause the least disturbance to any other person or company.
10. The Sub-Contractor shall provide information, documentation and the like to the Contractor so as to permit its compliance under the Main Contract with the Construction (Design and Management) Regulations 2015 and associated matters. This clause includes, but is not limited to, the provision of the Health and Safety Plan and Risk Assessments (where appropriate insofar as the Sub-Contract Works are concerned), and necessary information in order to permit the Contractor to compile the Safety File. The Sub-Contract Works shall not be deemed to be complete unless and until the information and/or documents referred to in, or arising from, this clause have been submitted to the Contractor.
11. The Sub-Contractor shall comply with the Contractor’s site safety and environment rules as current at the time of the execution of the Sub-Contract Works and shall ensure that all staff comply with and are fully conversant with such rules and with their responsibilities under health and safety legislation.
12. The Sub-Contractor shall store all materials neatly in areas designated by the Contractor and at all times shall keep the site clear of all debris arising out of its works and remove such debris to skips or other designated areas at its own expense and in all respects leave the whole of the Sub-Contract Works perfect on completion to the satisfaction of the Contractor and of the client or its representative.
13. The Sub-Contractor shall be responsible for the protection of the Sub-Contract Works and materials until practical completion of the Sub-Contract works.
14. Without prejudice to the foregoing the Sub-Contractor shall indemnify the Contractor against all actions, proceedings, damages, costs, losses and expenses arising therefrom or in connection therewith and will adequately insure against all claims of whatsoever nature which may be brought against the Contractor in connection with or arising out of the execution of the Sub-Contract Works which may be due to any act, default or negligence on the part of the Sub-Contractor its agents or servants, and in particular against:
14.1 Injuries or damage to any person whatsoever (including but not limited to a person employed by the Contractor, the Sub-Contractor, other sub-contractors of the Contractor) caused by or arising out of the execution of the Sub-Contract Works;
14.2 Injuries or damage to any property or thing (including the property or things of the Contractor) caused by or arising out of the execution of the Sub-Contract Work. Provided that nothing contained in these conditions shall impose any liability upon the Sub-Contractor in respect of any injury or damage caused solely by negligence or breach of statutory duty on the part of the Contractor or its servants or other sub-contractors or agents. If requested by the Contractor the Sub-Contractor shall produce the policy or policies of insurance relating to the risks aforesaid for the inspection of the Contractor within 7 days following such request.
15. Payment under the Sub-Contract will be made in accordance with the following:
15.1 If the Contractor receives an application for payment by post or by hand delivery from the Sub-Contractor which complies with the requirements of the Sub-Contract no later than the 22nd day of the relevant month the Sub-Contractor shall be entitled to interim payment of the value of work completed in accordance with the Sub-Contract, the value of materials necessarily delivered to site and any loss and expense ascertained by the Contractor under clause 16 herein, less deductions for the agreed retention percentage, any agreed discount and previous payments. Applications for payment must identify the amount which the Sub-Contractor considers to be due and a detailed build up to show the basis on which that sum is calculated. If the parties have agreed that payments will be made against stages, then payment will only be made when each stage has been fully completed in every respect to the satisfaction of the Contractor;
15.2 Applications for payment must include the full value for all variations carried out up to the date of each application. The Sub-Contractor does not have any entitlement to payment for the value of any variations carried out in previous months if the value was not included in the application for payment for the relevant month in which the work was carried out.
15.3 Interim payment will become due on the 10th day of the month following that in which the Contractor received the application for payment from the Sub-Contractor. The final date for payment is 45 days after the due date;
15.4 the Sub-Contractor shall within one month of completion of the Sub-Contract Works, submit to the Contractor a final application for payment setting out all items and amounts to which the Sub-Contractor considers it is entitled under or in connection with the Sub-Contract (‘Final Application’).
15.5 The Sub-Contractor shall not be entitled to payment of any amounts not included in the Final Application. If the Sub-Contractor does not submit a Final Application then the Contractor will make a final valuation based on the information in its possession at that time. The Sub-Contractor will provide further information or documents if requested by the Contractor but the Contractor is not obliged to make any such request.
15.6 The final payment will become due 28 days after the later of either the end of the Defects Liability Period, the completion of making good defects by the Sub-Contactor under clause 7 or the date on which the Contractor receives all information and documents requested from the Sub-Contractor in relation to the Final Application or one month after the latest date on which the Final Application should have been submitted by the Sub-Contractor. The final date for payment shall be 45 days after the due date.
15.7 The final payment is conclusive as to the amount finally due between the parties unless and to the extent that either party refers any dispute in relation to the final payment to adjudication within a period of 14 days following the final payment. In which case the amount due in the final payment will take account of any Adjudicator’s decision.
15.8 all works are subject to re-measurement unless stated otherwise;
15.9 the amounts deducted in respect of retention shall be paid as follows:
15.9.1 one half of the retention shall become due upon practical completion of the Sub-Contract Works and the final date for payment is 42 days after the due date;
15.9.2 the balance of the retention shall become due upon the Contractor confirming in writing that all defects notified at the end of the Defects Liability Period have been made good by the Sub-Contractor. The final date for payment is 42 days after the due date;
15.10 notwithstanding any other provision of the Sub-Contract, if the Employer (or similarly titled party) under the Main Contract becomes insolvent within the meaning of Section 113 of the Act and thereby fails to make payment to the Contractor for any works executed under the Main Contract, which works incorporate all or part of the Sub-Contract Works, then the Contractor shall have no obligation to make payment to the Sub-Contractor in respect of the Sub-Contract Works incorporated into the Main Contract Works for which payment has not been made under the Main Contract;
15.11 if the Contractor fails properly to pay the amount due to the Sub-Contractor by the final date for its payment the Contractor shall pay to the Sub-Contractor in addition to the amount not properly paid simple interest at the rate of 2% above the Bank of England base rate for the period until such time payment is made.
15.12 Notwithstanding any other provisions of the Sub-contract no payment will become due to the Sub-Contractor until after it has provided evidence of all necessary insurances.
15.13 If the Sub-Contractor becomes insolvent including any of the circumstances described in clause 20.4 below no further payment will become due until after to completion of the account described in clause 16 below. The due date shall be 6 months after the insolvency of the Sub-Contractor. The final date for payment is 45 days after the due date.
15.14 The Sub-Contractor shall commence the Sub-Contract Works at such time or times as the Contractor may direct and shall progress the Sub-Contract works regularly and diligently and complete no later than the Date for Completion. The Sub-Contractor shall carry out the Sub-Contract Works in a sequence and/or timescale directed by the Contractor.
16. The Contractor may issue instructions which revise the timing or sequence of the Sub-Contract works and may instruct suspensions and/or accelerations in the progress of the Sub-Contract Works. Instructions issued under this clause shall not comprise a variation under, nor a breach of, this Sub-Contract and will not entitle the Sub-Contractor to additional payment or extension of time.
17. If the Sub-Contractor is delayed in completing the Sub-Contract Works by:
17.1 the ordering of any variation of the Sub-Contract Works; or
17.2 any breach of the Sub-Contract by the Contractor; or
17.3 for a reason entitling the Contractor to an extension of time for completion of the Main Contract Works under the Main Contract, the Sub-Contractor shall be entitled to such extension of time (if any) as may in all the circumstances be reasonable provided that the Sub-Contractor constantly uses its best endeavours to prevent or minimise any delay in the progress of the Sub-Contract Works.It is a condition precedent to the Sub-Contractor’s right to an extension of time that the Sub-Contractor shall have given a written notice to the Contractor within 7 days of becoming aware of the event or such lesser period required for the Sub-Contractor to comply with clause 7 herein giving details of the delay. For the avoidance of doubt, the Sub-Contractor shall not be entitled to any extension of time on account of any circumstance arising by reason of any error, omission, negligence or default of the Sub-Contractor.
18. The Sub-Contractor is entitled be paid the amount of any loss and expense reasonably incurred as a result of any breach of the Sub-Contract by the Contractor or any variation instructed by the Contractor if the Sub-Contractor gives notice to the Contractor that it is, or is likely to incur loss and expense together with full supporting details including all available evidence no later than 7 days after the Sub-Contractor became aware or should reasonably have been aware of the breach of Sub-Contract or variation. If the Sub-Contractor does not fully comply with the requirements of this clause it does not have any entitlement to be paid the amount of any loss and expense. Recovery of loss and expense under the Sub-Contract is the Sub-Contractors entire entitlement to additional payment in respect of such breaches of the Sub-Contract or variations.
19. The Sub-Contractor shall comply with written instructions of the Contractor which vary the Sub-Contract Works. Variations shall be valued by the Contractor on a fair and reasonable basis, taking due account of any rates and prices included in the Sub-Contract. The Sub-Contractor is only entitled to payment for variations instructed in writing by the Contractor and has no entitlement to any additional payment for variations instructed other than in writing. The Sub-Contractor shall provide a written quotation for any variation instructed by the Contractor or any proposed variation within 5 days of a request by the Contractor.
20. The Contractor shall be entitled to terminate the employment of the Sub-Contractor immediately by notice in writing to the Sub-Contractor:
20.1 if the Sub-Contractor shall not proceed with the Sub-Contract Work regularly and diligently and at such times and/or in such sequence as instructed by the Contractor or as in the Contractor’s opinion is necessary to avoid delay to other trades or to complete such work within the time required by the Contractor; or
20.2 if at any time the Sub-Contract Work is not being carried out to the satisfaction of the Contractor; or
20.3 if the Sub-Contractor fails to comply with a written order from the Contractor to proceed with the Sub-Contract Work or with the delivery of goods or fails to rectify or replace defective work for the period named in such order; or
20.4 if the Sub-Contractor becomes insolvent which includes any act of bankruptcy or make or enter into any deed of arrangement or composition with creditors or suffer or allow any execution whether legal or equitable to be levied on the Sub-Contractor’s property or obtained against the Sub-Contractor or if being a company, the Sub-Contractor enters into liquidation whether compulsory or voluntary (except liquidation for the purpose of amalgamation or reconstruction) or has an administrative receiver or administrator appointed.
20.5 The Contractor shall be entitled by notice to the Sub-Contractor to terminate the Sub-Contractor’s employment under this Sub-Contract if the Sub-Contractor or any other person employed by him or acting on its behalf shall have committed an offence under the Bribery Act 2010.
21. If the Contractor’s employment under the Main Contract is terminated, the employment of the Sub-Contractor hereunder shall be automatically terminated.
22. If the employment of the Sub-Contractor is terminated no further amount shall be due for payment to the Sub-Contractor until after the completion of the Sub-Contract works. No later than 3 months following completion of the Sub-Contract works an account shall be prepared by the Contractor of the value of work properly executed by the Sub-Contractor less any additional costs, losses or damages incurred by the Contractor in completion of the Sub-Contract Work or as a result of the termination. The balance stated as due in such account from the Sub-Contractor to the Contractor or from the Contractor to the Sub-Contractor shall become due on the expiry of 6 months following the termination. The final date for payment will be 45 days after the due date.
23. The Contractor is entitled to set off any additional costs or losses incurred as a result of any failure by the Sub-Contractor to comply with its obligations under the Sub-Contract from any payment that becomes due to the Sub-Contractor under this Sub-Contract or any other Sub-Contract between the parties. Such costs or losses may include but are not limited to liquidated damages deducted or paid by the Contractor under the Main Contract and caused by such failure.
24. If the Client under the Main Contract terminates the Contractor’s employment under the Main Contract for any cause for which the Sub-Contractor is responsible the Sub-Contractor shall indemnify the Contractor in respect of all damages, costs, losses and expenses whatsoever and howsoever suffered by the Contractor by reason of or in connection with such termination.
25. The Contractor and Sub-Contractor hereby agree that, notwithstanding any other provision of the Sub-Contract, the Sub-Contract shall not purport to confer on any third party any right to enforce any term of the Sub-Contract for the purpose of the Contracts (Rights of Third Parties) Act 1999.
26. Actions or proceedings may be brought against the Sub-Contractor under the above Subcontract up to but not after the expiry of 12 years from the date of practical completion under the Main Contract Works or termination of the Contract if earlier.
27. No failure or delay by the Contractor to exercise any right or remedy provided under this Sub-Contract or by law shall constitute a waiver of that or any other right or remedy, nor shall it preclude or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall preclude or restrict the further exercise of that or any other right or remedy.
28. Whatever the nationality, residence or domicile of the Contractor or Sub-Contractor and wherever the Sub-Contract works are situated the law of England and Wales shall be the law applicable to this Sub-Contract and the English Courts shall have jurisdiction over any dispute or difference between the Contractor and Sub-Contractor.