Sub-Contractor

THESE ARE THE CONDITIONS REFERRED TO IN THE FOREGOING SUB-CONTRACT AGREEMENT BETWEEN THE CONTRACTOR AND THE SUB-CONTRACTOR.

1. INTERPRETATION - DEFINED TERMS

1.1. In this Agreement, save where defined herein, all defined terms shall have the meanings ascribed to them in the Main Contract.

1.2. “Anti-Slavery Policy” means the Contractor's anti-slavery policy attached in the Schedule of Documents and as amended by notification to the Sub-Contractor from time to time.

1.3. “Business Day” means any day which is not a Saturday, Sunday, Christmas Day, Good Friday or a day which under the Banking and Financial Dealings Act 1971 is a bank holiday.

1.4. “Contractor’s Policies” means the health, safety and other policies and procedures of the Contractor as amended, supplemented, varied and updated from time to time, copies of which are available from The Shore Group.

2. INTERPRETATION - CURRENT LEGISLATION

A reference to a statute, statutory legislation or other subordinate legislation (“Legislation”) is to such Legislation as amended and in force from time to time, including any legislation which re-enacts or consolidates it, with or without modification, and including corresponding Legislation in any other relevant part of the United Kingdom.

3. EXECUTION OF SUB-CONTRACT WORKS

3.1. The Sub-Contractor shall carry out and complete the works which are the subject of this Agreement (the “Sub-Contract Works”) regularly and diligently, in a proper and workmanlike manner and in compliance with this Agreement and any relevant provisions of the Main Contract, as directed by the Project Manager named in this Agreement or, if none is named, the Contractor.

3.2. The Sub-Contractor is deemed to have knowledge of the provisions of the contract between the Contractor and the employer (the “Main Contract”) for works on the Project at the Site (the “Main Contract Works”), a copy of which (excluding financial details) will be made available on receipt of a written request. The Sub-Contractor shall comply with all the provisions of the Main Contract so far as they relate to the Sub-Contract Works.

3.3. The commencement by the Sub-Contractor of the Sub-Contract Works will be on the express understanding that it will be proceeding with the Sub-Contract Works solely in accordance with this Agreement.

3.4. If requested, the Sub-Contractor will submit to the Contractor the name, address and National Insurance number of any person that it proposes to employ in relation to the Sub-Contract Works, prior to that person commencing work on Site.

3.5. The Sub-Contractor shall comply with the Contractor’s site rules and all statutory and other obligations applicable or relevant to it and to the Sub-Contract Works, and shall provide to the Contractor any documents and information as may be reasonably required by the Contractor.

3.6. The Sub-Contractor may, at its own risk, use any standing scaffold or ladders which are already in position and available for use on Site, and any welfare facilities provided on Site. The provision, if any, of any other services or equipment by the Contractor will be as stated in this Agreement.

3.7. In the event that the Sub-Contractor fails to comply wholly with clause 3.1, the Contractor may augment the Sub-Contractor’s labour-force or other resources, the control of which shall be the responsibility of the Sub-Contractor.

3.8. Where there is an inadequacy within the documents forming part of this Agreement or a discrepancy or divergence between the documents forming part of this Agreement, the Sub-Contractor shall inform the Contractor in writing of its proposed amendment to remove the discrepancy or divergence (as the case may be) and the Contractor shall decide between the discrepant or divergent items (as the case may be) or otherwise may accept the Sub-Contractor’s proposed amendments which shall not be a variation pursuant to clause 6 and the Sub-Contractor shall be obliged to comply with the decision or acceptance by the Contractor without adjustment of the Price or extension of time to the Completion Periods and without affecting in any way or to any degree the responsibility of the Sub-Contractor under this Agreement.

3.9. The Sub-Contractor shall ensure that at all times it complies with the Contractor’s Policies and the Sub-Contractor shall carry out and complete the Sub-Contract Works in accordance with the Contractor’s Policies at no cost to the Contractor.

4. HEALTH AND SAFETY

4.1 The Sub-Contractor shall comply with:

(a) the Health and Safety at Work etc. Act 1974;

(b) the Construction (Design and Management) Regulations 2015 (“CDM Regulations”);

(c ) all applicable health and safety legislation, Approved Codes of Practice and HSE guidance; and

(d) the Contractor’s health and safety policies and site rules.

4.2 The Sub-Contractor shall:

(a) cooperate with the Principal Contractor and Principal Designer;

(b) provide risk assessments and method statements prior to commencing work;

(c ) ensure all persons are competent, trained and supervised;

(d) report accidents, incidents and near misses immediately;

(e) comply with all site induction and permit systems.

4.3 The Sub-Contractor shall indemnify the Contractor against all losses arising from breach of this clause.

5. SUB-LETTING

The Sub-Contractor shall not, without the prior written consent of the Contractor, sub-let, assign or otherwise transfer any part of the Sub-Contract.

6. VARIATIONS

The Contractor may, at any time, instruct the Sub-Contractor to vary the Sub-Contract Works, and the Sub-Contractor shall forthwith comply with such instructions. No variations shall be made to the Sub-Contract Works or this Agreement unless authorised by the Contractor in writing. Any authorised variation to the Sub-Contract Works shall be valued on a fair and reasonable basis using, where relevant, prices in this Agreement.

7. COMPLETION & DEFECTS

7.1. The Sub-Contractor shall complete the Sub-Contract Works in the completion period or periods stated herein, together with any extensions thereof authorised by the Contractor in writing.

7.2. If stated to apply in the Particulars, when the Contractor, acting reasonably, is satisfied that the Sub-Contract Works have been completed he will issue a certificate (“Certificate of Sub-Contract Practical Completion”) to the Sub-Contractor.

7.3. Before the expiry of any defects liability period defined in the Main Contract, the Sub-Contractor shall, at its own expense, make good any defects, shrinkage and other faults in the Sub-Contract Works, as they become apparent.

7.4. If the Sub-Contractor fails to comply with clause 7.3, the Contractor may, after giving the Sub-Contractor five (5) Business Days written notification of its intention to do so, employ others to make good the defects at the Sub-Contractor’s cost.

8. LOSS & EXPENSE

8.1. Any expense, liability or loss incurred by the Contractor which is attributable to any negligence, breach of this Agreement or statutory duty, omission or default by the Sub-Contractor, may be deducted or set-off by the Contractor from payments otherwise due to the Sub-Contractor under this or any other contract between the parties or may be recovered as a debt.

8.2. The Contractor shall pay to the Sub-Contractor any expense or loss incurred by the Sub-Contractor which is attributable to any negligence, breach of this Agreement or statutory duty, omission or default by the Contractor.

8.3. The Contractor may only set-off sums:

(a) properly due under this Agreement; and

(b) notified in a valid Pay Less Notice.

8.4. No extension of time or loss and/or expense shall be given where or to the extent that any delay in the Sub-Contract Works is caused or contributed to by any negligence, breach of statutory duty, omission or default of the Sub-Contractor upon or in connection with the Sub-Contract Works.

9. DEFAULT

If the Sub-Contractor:

9.1. without reasonable cause wholly or substantially suspends the carrying out of the Sub-Contract Works;

9.2. fails to proceed regularly and diligently with the Sub-Contract Works;

9.3. refuses or neglects to comply with any instruction given by the Contractor;

9.4. fails to comply with the procedures and standards described in the Contractor’s Health and Safety Requirements for Sub-Contractors; or

9.5. fails to perform or complete the Sub-Contract Works in accordance with this Agreement, then such act shall constitute a default hereof and, if such default shall continue for three (3) Business Days after the Contractor has sent a written notice to the Sub-Contractor, by registered post or recorded delivery, stating the default, or if such default is repeated by the Sub-Contractor after the issue of such notice, then the Contractor may, by giving written notice to the Sub-Contractor by similar means, immediately terminate the Sub-Contractor’s employment under this Agreement.

9.6. If the Sub-Contractor is Insolvent as defined in clause 12 of this Agreement, then such act shall constitute a default hereof and the Contractor may, by giving written notice to the Sub-Contractor by registered post or recorded delivery, immediately terminate the Sub-Contractor’s employment under this Agreement.

10. PAYMENTS

The application date shall be the date or dates stated in the Particulars. Payments shall be made to the Sub-Contractor as follows:

10.1. Subject to clause 8.1, the Sub-Contractor shall be entitled to be paid the value of the Sub-Contract Works (including any authorised variations and any expense or loss incurred under clause 8.2) properly executed to the satisfaction of the Contractor, less any retention or discount which is applicable and excluding always the value of any off-site work or materials. No payment made by the Contractor shall be construed as confirmation or acceptance by the Contractor that the Sub-Contract Works have been carried out in accordance with this Agreement.

Interim Payments

10.2. If the Contractor fails to issue a Payment Notice within 5 days of the Due Date, the Sub-Contractor’s application for payment shall be deemed to be the Payment Notice for the purposes of section 110B of the Housing Grants, Construction and Regeneration Act 1996.

10.3. Payment shall be due to the Sub-Contractor or to the Contractor, as the case may be, on the due date and the Contractor may no later than five (5) days after the due date give notice to the Sub-Contractor of the amount calculated to be due to the Sub-Contractor or to the Contractor, as the case may be (“Payment Notice”).

10.4. Payment shall be made to the Sub-Contractor or to the Contractor, as the case may be, by the final date for payment. The Contractor may give a Pay Less Notice no later than 5 days before the Final Date for Payment, specifying the sum considered due and the basis of calculation (“Pay Less Notice”).

10.5. Subject to the issue of a Pay Less Notice issued pursuant to clause 10.4, the amount of the payment to be made to the Sub-Contractor or to the Contractor, as the case may be, on or before the final date for payment shall be the amount stated as due in the Payment Notice.

Suspension for Non-Payment

10.6. If the Contractor fails to pay a notified sum by the Final Date for Payment, the Sub-Contractor may suspend performance after giving 7 days written notice. In this case the Sub-Contractor shall be entitled to an extension of time and reasonable costs and expenses incurred due to suspension.

Final Payment

10.7. The Sub-Contractor may submit a final valuation statement of the Sub-Contract Works properly executed including any sum which the Sub-Contractor considers to be due to it from the Contractor under this Agreement (“the Sub-Contractor’s Final Statement”) not less than seven (7) days before the final application date. Unless otherwise stated in the Particulars, the final application date shall be the end of the twelfth (12th) calendar month from either the date of practical completion of the Sub-Contract Works or, if clause 7.2 applies, the date of practical completion stated in the Certificate of Sub-Contract Practical Completion. The Sub-Contractor’s Final Statement shall be made on the basis of this agreement together with any rates and prices contained herein and shall be sufficiently detailed to enable the Contractor to ascertain the amount due to the Sub-Contractor or to the Contractor, as the case may be.

10.8. Payment, in respect of the Sub-Contractor’s Final Statement, shall be due to the Sub-Contractor or to the Contractor, as the case may be, seventy (70) days after the final application date and the Contractor may no later than five (5) days after the final due date give notice to the Sub-Contractor of the amount calculated to be due to the Sub-Contractor or to the Contractor, as the case may be (“Final Payment Notice”).

10.9. Payment, in respect of the Sub-Contractor’s Final Statement, shall be made to the Sub-Contractor or to the Contractor, as the case may be, by the final date for payment, which shall be eighty (80) days after the final application date. If the payer intends to pay the Sub-Contractor less than the sum due under clause 10.7, it shall, not later than the Prescribed Period, give the Sub-Contractor notice of that intention (“Final Pay Less Notice”).

10.10. Subject to the issue of a Final Pay Less Notice issued pursuant to clause 10.8, the amount of the payment to be made to the Sub-Contractor or to the Contractor, as the case may be, on or before the last final date for payment shall be the amount stated as due in the Final Payment Notice or, if a Final Payment Notice is not given, the amount stated as due in the Sub-Contractor’s Final Statement. Nothing in this clause shall prevent either party from referring a dispute to adjudication or litigation.

Retention

10.11. Unless otherwise stated in the Particulars, the Sub-Contractor may apply for payment of fifty per cent (50%) of any retention being held by the Contractor in the Sub-Contractor’s Statement submitted in the month following either the date of practical completion of the Sub-Contract Works or, if clause 7.2 applies, the date of practical completion stated in the Certificate of Sub-Contract Practical Completion. The Sub-Contractor may apply for payment of any remaining retention in the Sub-Contractor’s Final Statement or, if later, in the calendar month after the completion of the rectification of all defects in the Sub-Contract Works (which have been notified to the Sub-Contractor prior to the expiry of the defects liability period as defined in the Main Contract). Retention shall be held on trust in a separate account until released.

Payment on Insolvency

10.12. The Contractor shall not be required to pay the Sub-Contractor where:

(a) the Employer under the Main Contract becomes insolvent within the meaning of section 113 of the Housing Grants, Construction and Regeneration Act 1996; and

(b) the non-payment relates to sums not received by the Contractor from the Employer.

10.13. This Agreement shall operate subject to the Corporate Insolvency and Governance Act 2020. Termination rights shall not apply where prohibited by sections 233B–233C Insolvency Act 1986.

Failure to Pay

10.14. If the Contractor or the Sub-Contractor, as the case may be, shall fail to make any payment due to the Sub-Contractor or to the Contractor, as the case may be, by the Final Date for payment, then the Sub-Contractor or the Contractor, as the case may be, shall be entitled to be paid simple interest on any sum due and outstanding at the rate of two per cent (2%) per annum above the Bank of England Base Rate which, for the purposes of The Late Payment of Commercial Debts (Interest) Act 1998, shall and is hereby agreed to be a "substantial remedy".

10.15. Subject to the issue of a Pay Less Notice or Final Pay Less Notice, all and any sums due to the Contractor under this Agreement shall be recoverable from the Sub-Contractor as debts.

11. CONSTRUCTION INDUSTRY STATUTORY TAX DEDUCTION SCHEME

The Income Tax (Construction Industry Scheme) Regulations 2005 No. 2045 (“CIS”) applies to this Agreement. Therefore if the Sub-Contractor is a ‘Sub-Contractor’ for the purposes of the Finance Act 2004 and CIS, it is advised to produce to the Contractor such evidence as is required by CIS for the verification of its Sub-Contractor’s tax status to enable the Contractor to ascertain whether payments shall be made without the deduction of tax. If the Sub-Contractor does not provide valid CIS details, or if the Sub-Contractor is not registered for CIS, the Contractor shall make the deduction of tax from any payments due to the Sub-Contractor as instructed by HMRC.

12. INSOLVENCY

For the purposes of this Agreement, insolvent (“Insolvent”) shall be defined as follows:

12.1. an entity which is a company becomes Insolvent:

12.1.1. when it enters administration within the meaning of Schedule B1 to the Insolvency Act 1986;

12.1.2. on the appointment of an administrative receiver or a receiver or manager of its property under Chapter I of Part III of that Act, or the appointment of a receiver under Chapter II of that Part;

12.1.3. on the passing of a resolution for voluntary winding-up without a declaration of solvency under section 89 of that Act; or

12.1.4. on the making of a winding-up order under Part IV or V of that Act.

12.2. an entity which is a partnership becomes Insolvent:

12.2.1. on the making of a winding-up order against it under any provision of the Insolvency Act 1986 as applied by an order under section 420 of that Act; or

12.2.2. when sequestration is awarded on the estate of the partnership under section 12 of the Bankruptcy (Scotland) Act 1985 or the partnership grants a trust deed for its creditors.

12.3. an entity who is an individual becomes Insolvent:

12.3.1. on the making of a bankruptcy order against him under Part IX of the Insolvency Act 1986; or

12.3.2. on the sequestration of his estate under the Bankruptcy (Scotland) Act 1985 or when he grants a trust deed for his creditors.

12.4. an entity also becomes Insolvent if:

12.4.1. it enters into an arrangement, compromise or composition in satisfaction of its debts (excluding a scheme of arrangement as a solvent company for the purposes of amalgamation or reconstruction); or

12.4.2. (in the case of an entity which is a partnership) each partner is the subject of an individual arrangement or any other event or proceedings referred to in this clause 12.

Each of sub-clauses 12.1, 12.2, 12.3 and 12.4 above also includes any analogous arrangement, event or proceedings in any other jurisdiction.

13. INDEMNITIES

13.1. Notwithstanding any other provision of this Agreement, the Sub-Contractor shall be liable for and shall indemnify the Contractor against any expense, liability, loss, claim or proceedings, whatsoever, in respect of personal injury to or the death of any person, or in respect of any loss or damage to any property arising in the course of or caused by the carrying out of the Sub-Contract Works, to the extent that the same is due to any act, negligence, breach of statutory duty, omission or default of the Sub-Contractor, his servants or agents.

13.2. The Sub-Contractor undertakes to the Contractor that no act, omission or default of the Sub-Contractor in relation to the Sub-Contract Works shall constitute, cause or contribute to a breach by the Contractor of its obligations under the Main Contract. In the event of any such breach the Sub-Contractor shall indemnify and keep indemnified the Contractor against all liability, costs, expenses, damages and losses (including but not limited to direct, indirect or consequential losses, loss of profit, loss of reputation and all interest, penalties and legal costs (calculated on a full indemnity basis) and all other professional costs and expenses) suffered or incurred by the Contractor arising out of or in connection with any such breach.

14. INSURANCE RISKS & DAMAGE

14.1. The Sub-Contractor will be liable for and shall indemnify the Contractor against any loss, injury or damage whatsoever to the Sub-Contract Works until the Sub-Contract Works have been fully and finally incorporated into the Main Contract Works and will insure such Sub-Contract Works on an All Risks (or similar) basis.

14.2. In addition, the Sub-Contractor shall take out and maintain policies of insurance for the following:

14.2.1. Unless otherwise specified in the Particulars, Employers’ Liability, with a minimum indemnity of not less than ten million pounds (£10,000,000) in respect of any one occurrence, which shall comply with the Employer’s Liability (Compulsory Insurance) Act 1969. The Contractor’s interest must be noted on the policy; and

14.2.2. Unless otherwise specified in the Particulars, Public Liability, with a minimum sum insured of five million pounds (£5,000,000) in respect of each and every claim and, to the extent that the Sub-Contract Works include the installation of products, such insurance must include Product Liability Insurance on the same terms. The Contractor must be named as Joint Insured to the extent of the indemnities to be given in clause 13.

14.2.3. Unless otherwise specified in the Particulars, Professional Indemnity, with a minimum sum insured of two million pounds (£2,000,000) in respect of each and every claim and, to the extent that the Sub-Contract Works include design responsibility.

14.3. The Sub-Contractor shall produce evidence of the insurance referred to in this clause and confirmation of payment of premium(s) in respect of such insurance on request.

15. DISPUTE RESOLUTION

Either party may refer any dispute at any time to adjudication under Part 1 of the Scheme for Construction Contracts (England and Wales) Regulations 1998 (as amended).

The adjudicator’s decision shall be binding until finally determined by litigation or arbitration.

16. BRIBERY AND CORRUPTION

The Contractor shall be entitled, by written notice sent by registered post or recorded delivery to the Sub-Contractor, to immediately terminate the Sub-Contractor’s engagement under this Agreement or any other contract with the Contractor if, in relation to this Agreement or any other contract, the Sub-Contractor or any person acting on its behalf or associated with it, shall have committed an offence under the Prevention of Corruption Acts 1889 to 1916, the Bribery Act 2010, or, where the employer under the Main Contract is a local authority has committed an offence under any applicable Legislation or at common law in respect of corrupt or fraudulent acts. For the purposes of this clause, whether a person is associated with another person shall be determined in accordance with section 8 of the Bribery Act 2010 and a person associated with the Contractor includes, but is not limited to, any sub-contractor of the Contractor.

17. ANTI-SLAVERY

17.1. In performing its obligations under this Agreement, the Sub-Contractor shall and shall ensure that each of its sub-subcontractors and consultants shall comply with:

17.1.1. all applicable laws, statutes, regulations and codes from time to time in force including but not limited to the Modern Slavery Act 2015; and

17.1.2. the Anti-Slavery Policy.

17.2. The Sub-Contractor shall implement due diligence procedures for its own suppliers, sub-subcontractors, consultants and other participants in its supply chains, to ensure that there is no slavery or human trafficking in its supply chains.

17.3. The Sub-Contractor shall prepare and deliver to the Contractor no later than 31 December each year, an annual slavery and human trafficking report setting out the steps it has taken to ensure that slavery and human trafficking is not taking place in any of its supply chains or in any part of its business.

17.4. The Contractor shall be entitled to terminate the Sub-Contractor’s employment under this Agreement immediately in the event of any failure to comply with this clause 17 by the Sub-Contractor.

17.5. A breach of any of the above shall be a material breach entitling termination.

18. IR35 / OFF-PAYROLL

The Sub-Contractor warrants that it is not an employee of the Contractor and it is responsible for all tax and NIC. Further, it shall indemnify the Contractor against HMRC claims.

19. EQUALITY AND RIGHT TO WORK

The Sub-Contractor shall comply with Equality Act 2010, ensure all workers have the legal right to work in the UK and provide evidence on request.

20. LIMITATION OF LIABILITY

The parties agree that the limitation period for the purpose of bringing any action or proceedings under this Agreement shall be twelve (12) years from the date of practical completion of the Main Contract Works.

21. BUILDING SAFETY ACT 2022

The Sub-Contractor shall:

(a) comply with the Building Safety Act 2022 and all secondary legislation;

(b) cooperate with all dutyholders;

(c ) provide information required for the “Golden Thread”;

(d) maintain competence in accordance with statutory requirements;

(e) promptly provide safety information, as-built data and product information.

22. THE CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

Nothing in this Agreement confers or purports to confer any benefit or any right to enforce any of its terms on any person who is not a party to the Agreement.

23. DATA PROTECTION

The parties shall comply with the UK GDPR and the Data Protection Act 2018. The Sub-Contractor shall:

• process personal data only as necessary for this Agreement; and

• implement appropriate security measures; and

• not retain data longer than necessary; and

• indemnify the Contractor against breaches.

24. ENTIRE AGREEMENT

The Contractor and the Sub-Contractor respectively acknowledge that this Agreement forms the entire contract between the Contractor and the Sub-Contractor to the exclusion of any antecedent statement or representation. In the event of any ambiguity, nothing contained in the Schedule of Documents shall override the Particulars.

25. LAW

This Agreement shall be construed and governed in all respects in accordance with the law of England. The parties agree that the courts of England and Wales shall have non-exclusive jurisdiction to determine any dispute arising out of or in connection with this Agreement.

26. DIRECT CONTRACTING WITH THE CONTRACTOR’S CLIENT

The Sub-Contractor is entitled to seek, apply for and accept contracts to supply services to other parties during the currency of this contract so long as they have no commercial relationship, either direct or indirect, with the Client during or in the six months after the cessation of this contract.