In mid-big sized projects, it is a crucial to
understand how to subcontract part of the works
especially in an international construction project. The
various issues involved in subcontracting part of the works can
determine the success or the failure of a project and/or
can massively increase the financial risks and/or losses
for either the Employer or the Contractor.
The reasons why a Contractor subcontracts part of the
works can be various such as that the project is a large one or
that a specific part of the scope of works requires specific skills
and expertise that the Contractor does not have.
There are also cases where it is the Employer which requires
that part of the scope of works be carried out by Subcontractors
with specific and 'proved' experience.
Generally the contract between Employer and Contractor
provides if and to what extent the Contractor is entitled to
subcontract part of the works and this will mainly depend on the
type of contract.
In this respect there are various scenarios and the main
contract between the Employer and the Contractor might provide
the Contractor can freely subcontract part of the
the Contractor can subcontract only specific part
of the scope of works (for instance the electrical or
mechanical part of the works); or
the Contractor cannot subcontract certain
specific part of the works (for instance those in respect
of which the Employer has provided detailed design).
In all the cases one of the main points to be considered is the
liability of contractor for subcontractor works in
respect of tha part of the scope of works that has been
The main risks for the Contractor arise in all those
circumstances in which the Employer has had a role in the
subcontractor selection process.
The Contracator can in fact either subcontract:
with the prior consent of the Employer; or
to companies included in a list agreed in advance with the
to companies selected directly by the Employer.
While the Employer will seek to excmailto:firstname.lastname@example.org
any liability that may arise as a consequence of the subcontractor
selection process the Contractor might face liabilities for
subcontractor underperformance especially if the latter
has been 'imposed' (directly or indireclty) by the
Below you can dowload the full Guide on How to
Subcontract in International Projects.
Back in Issue 05 of IQ, we examined the decision in Yam Seng PTE Ltd v International Trade Corporation Ltd and looked at whether a general obligation of good faith could be implied into contracts made in accordance with English law.
A recent report1 by Global Construction Perspectives and Oxford Economics forecasts that by 2030 the volume of construction output will grow by 85% to US$15.5 trillion worldwide, with China, the US and India leading the way and accounting for 57% of all global growth.
There are not enough homes to meet demand in much of the UK, and the tragedy is that despite recent fine words, Government policy still seems on course to keep it that way.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).