Civil Engineering Reference
In-Depth Information
accept a specific sub-contractor's quotation, is
the employer liable if the contractor fails to pay?
The question of whether a contractor can refuse to accept such a quotation has been dealt
with elsewhere. Assuming that a contractor has accepted the quotation, the question really
is whether the employer has any liability to the sub-contractor after that. It often happens
that a contractor becomes insolvent while owing money to sub- contractors. Does it make
a difference that the contractor was instructed to accept this particular sub-contractor? In
principle, it does not make a difference. So far as the employer is concerned, this is a sub-
contract freely entered into between contractor and sub-contractor by which, in return for
work, the contractor agrees to pay the sub-contractor a certain amount of money. If, for any
reason, the contractor fails to pay, that is a matter between the contractor and the sub-con-
tractor. The employer is not a party to the sub-contract and has no liability to either party
under it, although of course the employer has certain duties to the contractor under the main
contract. This question was probably prompted by memories of the nominated sub-contract
provisions in JCT 98. Under those provisions, if the contractor failed to pay a nominated
sub-contractor money which the contractor had been directed, as part of the certificate, to
pay, the architect could certify the failure to the employer, who then had to pay the sub-con-
tractor directly the amount owed by the contractor. The employer was entitled to deduct the
amount from any further money due to the contractor. Even these provisions were modified
if the contractor became insolvent. There are no nominated sub-contract provisions in the
2011 suite of JCT contracts, and the existing naming provisions do not allow the employer
to pay sub-contractors directly if the contractor fails.
