Assignment Of Subcontract Agreement

Subcontracting is not the same as an assignment of contractual rights (duly referred to as a “transfer”). Although the end result may be the same from a commercial point of view, the supplier may not exempt the customer from any of the services to be provided by the supplier without the prior written consent of the customer. The decision may also lead to the inclusion of enhanced assignment clauses in subcontracts. These provisions effectively put the transfer of the subcontractor beyond the reach of the contractor and may avoid the position in which the contractor finds itself in the particular case. Whether contractors are free to propose such restrictions themselves depends on the terms of the applicable main contract, since some require the contractor to guarantee, to the extent possible, the possibility of subcontracting. Despite the pervasiveness of such provisions, their scope and functioning have rarely been tested. A particular point of ambiguity concerns the way in which the contractor`s legal relationship with its subcontractors is influenced by such contracts. After termination for delay, the employer will usually assert large claims against the contractor for the costs of completion of the work, delay and other redundancy losses. A contractor would normally try to pass on such claims to its supply chain to the extent possible, but what about orders placed with the employer? Can the contractor still transfer debts arising from subcontracts assigned to the employer? General law allows the supplier to assign or delegate services for which it is entrusted to its own customer, unless this falls within one of the narrow exceptions mentioned above. “The customer may request the contractor to leave the site, remove from the website all equipment, installations and materials and assign to the customer the benefit of a subcontract or other contract related to the performance of the contract.” Manufacturing contracts generally provide for the assignment of subcontracts to an employer in the event of termination due to delay by the contractor. All important standard forms contain such rights. For example, in the JCT Design & Build 2016 issue, clause 8.7.2.3 states that the contractor must do the following: This is an important decision that will likely be widely implemented. As noted above, provisions requiring the assignment of subcontracts in the event of termination for delay are common in the industry and it is difficult to distinguish the formulations used in the JCT and NEC forms from those considered by the court in this case.

It is less easy to apply the decision to the FIDIC form, since there is an adequacy requirement: for example, it could be argued that MW`s distinction between the transfer of future rights and acquired rights is a fair balance between the employer`s interests in securing the future performance of subcontractors after the dismissal and the interests of the main contractor. respect for the rights of its delivery. Chain with regard to the dismissal of the employer. . . .