Take action to safeguard your business from the catastrophic impact of delay and disruption.
If you don’t then it could cost you your business, says Barry Ashmore.

WHATEVER else you do today please take five minutes to read this article. Because the blunt truth is if things are going wrong and you don’t do what the contract says you have to do you’ll lose your entitlements and put your business at risk.

If you think that’s BS, then read the Construction News Article of 8 June 2023 that confirms 42 construction-sector companies went into administration in May this year setting a grim monthly record as the highest number since January 2020.

And you can bet your life that non-payment and monies being set off for alleged delays and/or under valuation by contractors will feature in there somewhere. As a matter of practicality, flooring contractors are one of the last trades onsite, so you’re therefore an easy target for the contractor to blame you for delays and hack big chunks off your payments.

Check the contract BEFORE you enter into it
It’s too late to start thinking about the contract when you’re being beaten up by the contractor so you must check it before you enter into the contract. Why do you think they use their own contracts or make amendments to the JCT or NEC contracts? Quite simply, so they can use those onerous provisions against you when they need to.If you don’t understand contracts, and let’s face it the vast majority of specialist contractors can’t afford to have inhouse expertise, you can get an initial check of your contracts for free if you’re one of our members. Please take a look at: streetwisesubbie.com/tribe/checkit/

Condition precedent
One such onerous provision is making notices a condition precedent to entitlement. The first thing to say is DO NOT accept them, but if you’ve accepted them, then you MUST comply with them. Here’s one eminent definition of condition precedent that illustrates the point:

A condition precedent is a contractual stipulation that must be satisfied before a right or an obligation comes into existence.

So, if you don’t do what you’re supposed to do, when you’re supposed to do it, you’ll lose your entitlements. You’ll get clobbered and you won’t get paid. And if you think there’s room for argument, think again, because the House of Lords has upheld their use. So please, don’t ignore conditions precedent.

Tell them what they already know but are ignoring – be proactive!
You may think ‘the contractor knows we can’t lay the floor because…’ But that doesn’t protect you because you have to issue notices and tell them what they already know but are choosing to ignore.

Be proactive, serve your notices, but don’t get bogged down in a ‘letter war’ for its own sake. Show a willingness to talk to the client and/or contractor and explain your problem to them, discuss and propose possible solutions.

One often overlooked purpose of giving notice is to ensure the contractor knows exactly what’s going on, and to give him the opportunity to do something about the matters which are delaying you. Because rest assured if you don’t issue notices, they’ll trot out the ‘if you had told us we would have acted on it and made that area available’.

Complete nonsense of course, but I’ve heard it 1,000 times.

Obligations to accelerate
Another onerous provision is the obligation to accelerate your works.

In the absence of an express provision in the contract, there’s no general obligation on you to accelerate the progress of the works where they’ve fallen behind programme because of matters beyond your control.

If the contractor wishes you to accelerate, then he must secure your agreement. If he purports to issue a direction to accelerate, you can refuse to comply unless he can demonstrate he’s empowered to instruct you to do so under the contract.

So, watch out for non-standard clauses requiring free acceleration.

Back up the notice with evidence
Don’t rely on anyone else to have details of the delay issue. Without evidence your claim will fail.
Wherever possible supply back up information to support the delay notice, if you can cross reference all other information, including, if possible, a programme showing the effect on the works. If you can’t send back up information at the time, then follow it up as soon as you can with further information.

An example of an old-fashioned notice:
‘We’ve received your letter dated 8 September 2023 accusing us of delay in the basement. We’re amazed at your allegations, which just prove you’re completely out of touch with the real situation onsite. This is another case where our willingness to be helpful has been used against us. If certain parties spent more time out onsite and less time criticising others, then the job would be a lot further on etc.”

This is a wonderful example of the old-fashioned approach. Full of irrelevant emotion, and totally silent on facts. The contractor must have gone through the roof when he read it. The fact the subbie’s remarks were probably true would have probably rubbed salt into the wound. And the contractor would be getting his own back by knocking down your valuation and final account, and hitting you with contra charges.

The same letter using a more subtle approach
Let us look at the same letter using a more subtle approach, designed to protect ourselves contractually without being too confrontational.

‘We confirm our site visit on 7 September 2023 and thank you for taking the time to look round the site with us. The present state of building progress is not quite ready for a start on flooring works (ie, roof incomplete, and considerable waterlogging in the basement, where we’re due to commence). We confirm our agreement that we visit again in a week’s time, and that we shall jointly review the situation. Assuring you of our full co-operation.’

This example is factual, polite and non-aggressive.

Alternatively:
‘Thank you for giving us your time onsite yesterday when we discussed the progress situation in the basement. As we explained, the reason for being unable to commence work in this area has been owing to the general lack of weather-proofing, as a result of the general lack of progress of the roofing works. However, we’re pleased to see the situation is rapidly improving and hope to move into the area with a squad of four carpet fitters on 18 September 2023. Assuring you of our commitment etc…’

This example gives details of the cause and exact activity affected, in a friendly and reassuring way.
Alternatively:

‘We’re in receipt of your letter dated 8 September 2023 regarding progress in the basement. We would respectfully refer you to our Delay Notices Nos 1267 and 1268 dated 4, 11, 18 and 25 of August and 1 September 2023, when we reported we were at a standstill in the basement owing to water ingress and the storage of materials. However, we’ve kept close contact, and note that the roof has been made weathertight and the materials will be moved by 15 September. We shall therefore return with a full squad on Monday 18 September, to expedite completion of this area. Assuring you of our best attentions.’

This example refutes the allegations, in a calm, factual and non-emotional way.

Whatever you do, you must take action
Take action to safeguard your business from the catastrophic impact of delay and disruption. If you don’t then it could cost you your business… Some unscrupulous contractors use every trick in the book to reduce and delay payments, including blaming you for delay and setting off all the costs against your account.

Don’t be one of the casualties – take action now.

You can call us for initial no cost advice on 01773 712116 and use our commercial and contractual expertise to establish the best course of action.
01773 712116info@streetwisesubbie.com
www.streetwisesubbie.com
Barry Ashmore is managing director and co-founder of StreetwiseSubbie.com