Back-to-back provisions in construction contacts
The term ‘back-to-back’ refers to the replication of contractual terms through the supply chain.
As contractors increasingly sub-contract much of their work to others, so the construction supply chain has become longer and more complex. It is important for all parties to ensure that certain rights and obligations exist not only in their own agreements, but also in the agreements contracting parties have with others. This ensures that the main contractor is not left responsible for all obligations to the employer, that sub-contractors have enforceable rights and that timings are co-ordinated throughout the supply chain.
Typically, descriptions of back-to-back requirements focus on the relationship between the employer, contractor and sub-contractors, but they apply equally to sub-sub-contractors, suppliers, consultants and sub-consultants.
In its strictest form, back-to-back refers not just to the replication of contractual rights and obligations in different levels of contract, but to a requirement that the terms of agreement at one level are included in agreements at lower levels.
This is a very complex process that requires careful consideration and drafting to ensure the correct terms - and only those terms - are passed on, that they are phrased appropriately and that requirements, and in particular timings, are properly co-ordinated.
Back-to-back provisions can be created by:
- Including reference to terms in the main contract to be included, excluded or varied in a sub-contract. This requires very careful checking as it can be difficult to identify every clause that is relevant and it results in a need to cross-reference between agreements; it also requires that sub-contractors have access to higher tier contracts.
- Drafting bespoke sub-contracts that reflect the rights and obligations in the main contract. While the end result is neater and simpler to understand than referencing, equal care needs to be taken in drafting.
- Using standard form contracts that already include back-to-back provisions in main contracts and sub-contracts.
Key aspects of construction contracts that might require back-to-back provisions include:
- Key dates, notification periods and other time-related procedures. For example, claims can fail if the timing of the sub-contract claims procedure does not give the main contractor sufficient time to make a claim themselves.
- Enforcement of dispute resolution findings and the right to participate in proceedings.
- A requirement that valid claims must be passed on.
- Allocation of liability for liquidated damages.
- Entitlement to extensions of time.
- Entitlement to loss and expense.
- Information and reporting requirements.
- The definition of completion.
- Obligations to achieve a certain quality and to comply with certain standards.
- Indemnities.
- Collateral warranties.
- Suspension and termination rights.
- Design responsibilities.
- Transfer of copyright.
The Housing Grants Construction and Regeneration Act prevents the inclusion of pay-when-paid or pay-when-certified clauses, and the release of retention (i.e retention monies) cannot be prevented by conditions within another contract.
[edit] Related articles on Designing Buildings Wiki
- Building Users' Insurance Against Latent Defects.
- Collateral warranties.
- Concession Contracts Regulations.
- Construction contracts.
- Contra charges.
- Flow-down term.
- Housing Grants Construction and Regeneration Act.
- Liberty Mercian Limited v Cuddy Civil Engineering Limited and others.
- Pay when paid.
- Proprietary information.
- Sub-consultants.
- Sub-contracts.
- Z clauses.
Featured articles and news
Specifying rendered external wall insulation for fire safety
How to interrogate the evidence provided to the specifier.
The benefits of writing articles for your organisation
How to create a profile for your organisation and publish for free.
No Falls Week. The importance of safe working at height
What to expect and what is on offer to avoid accidents.
Scottish Government action to reach net-zero targets
Retrofit expert group highlight critical actions needed.
A forward thinking, inclusive global community of members.
From engineered product life-spans, to their extension.
Circular economy in the built environment
A brief description from 2021. Where are we now?
Mental Health Awareness Week with ABS
Architects Benevolent Society programme of activity.
CLC publishes domestic retrofit competency framework
Roadmap of Skills for net zero.
May 13-19: Moving more for our mental health.
Understanding is key to conservation.
Open industry engagement survey seeks responses
Institutions and the importance of engagement.
National Retrofit Hub unveils new guide
Digital Building Logbooks and Retrofit: An Introduction.
Enhancing construction site reporting efficiency
Through digitisation and the digital revolution.