Please Don't Get It This Wrong!

We have just given some initial free advice to a Specialist Contractor about his outstanding account. Now before you start criticising me, I know that most Specialist Contractors don't get it this wrong, but it's worth sharing this to illustrate a few important points.

And those points are that

• you need to know exactly who it is you are actually contracting with
• you need to get your contract terms right from the outset
• you need to do what needs to be done when it needs to be done and
• you need to comply with the terms of the contract

Otherwise this is the kind of advice you might receive;

"Hi Fred [not their real name of course]

Thank you for your email.

I have spent some time looking at what you have sent over and what you have said in your emails.There are a number of serious issues which you need to consider carefully;

1. There appear to be two separate contracts which are between your company Company A and Mr Bloggs company Company B. Even if you were successful in an action he could easily liquidate that company and you would be left with nothing. [Fred thought he was in contract with Mr Bloggs]

2. Potentially you could adjudicate (that needs further investigation), but even if you could and you won, Company A is a company of straw and they could resist enforcement on that basis, as adjudication is only temporarily binding. [Fred thought having a separate company to do this job was a good idea]

3. You say that; “the original contract ended up completely different to what was required” but do not refer me to variation instructions, and the like. You need to be able to deal with all of the variations and prove your entitlement in accordance with the terms of the contract.

4. As regards the terms of the contract, this appears to be a facsimile of the JCT Minor Works form but it is incomplete – where are the Conditions? [the contract was cobbled together]

5. You say “…which finally resulted in our sub-sub-contractor refusing to go back to site”. Unfortunately that is a breach of contract for which Company A are responsible.

7. In your email of .... you say; “we gave them the option of paying for what had been done to date, then we would return to site to complete the work”. Unfortunately you have no contractual entitlement to issue such an ultimatum, and you also say; “They refused to pay all outstanding invoices so we wouldn’t go back to site, and are now claiming we have broken the contract”. Unfortunately you are indeed in breach of contract by not completing the works.

All in all, my view would be that you face considerable obstacles and costs in securing any further payment from Company B and I would be inclined to try and appeal to Mr Blogg’s better judgement and see if you can persuade him to pay at least some of the costs which you can demonstrate to him.

I am sorry I cannot be any more positive about the potential outcome but you could easily spend a few thousand pounds on fees which effectively get you nowhere."

Please don't be like Fred. There is no reason to get it this wrong!

There lots of free resources on our web site at streetwisesubbie.com including our free Contractual Toolkit which you can download from our home page.