Contract Law Basics for Subcontractors

In episode 73 of The Subcontractors Blueprint podcast, host Jacob Austin addresses the  topic of amending standard forms of contract in the construction industry. Jacob explains why these amendments are often necessary, such as adapting to new regulations or project-specific needs, but also highlights the potential risks and misunderstandings they can cause. He provides practical strategies for subcontractors, including early review of amendments, proactive negotiation, thorough documentation, and seeking professional advice. Jacob aims to empower subcontractors with the knowledge and tools to navigate contract modifications confidently, ensuring their interests are protected. KEY TAKEAWAYS:  Reasons for contract amendments and their necessity.  Potential pitfalls and risks associated with contract modifications.  Importance of understanding the implications of amendments.  Real-world examples illustrating the consequences of poorly drafted amendments.  Importance of documentation and record-keeping during negotiations.   BEST MOMENTS: "Amendments can be double-edged swords; on one side, well-drafted revisions help ensure compliance with new regulations, but on the other, they can be misused to push maximum risk onto someone else's shoulders." "Nobody likes doing extra paperwork, but getting things defined at the start of the job and setting clear expectations is the best way to procure a job." "I want you as a subcontractor to be able to enter into agreements with your eyes open to what goes on." "You don't want a situation where you started work and now the contract is saying, "Hold on, I can't pay you because you haven't signed my contract." "Understanding what amendments are intended to do and how they can be misused gives you the ability to push back where it's appropriate and approach amendments with cautious optimism."   Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on. HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories. LinkedIn - www.linkedin.com/in/jacob-austin/ Instagram - www.instagram.com/qs.zone/ www.qs.zone/all-links

In episode 72 of The Subcontractors Blueprint podcast, host Jacob Austin provides an in-depth analysis of the JCT Standard Building Subcontract 2016. Aimed at construction business owners, the episode educates subcontractors on the critical components of contract documents. Jacob emphasises the importance of understanding these documents to minimise the risk you take on as a subcontractor. He covers key elements such as contract structure, clauses, and requirements, while also addressing the significance of accurate contract drawings and specifications. By demystifying these aspects, Jacob equips subcontractors with the knowledge to avoid disputes and ensure successful project execution.   KEY TAKEAWAYS:  Importance of understanding contract documents for subcontractors.  The significance of accurate contract drawings and specifications.  Role of contractor design portions and alignment with subcontractor proposals.  Importance of health and safety documents in construction contracts.  Strategies for interpreting contract terms and addressing discrepancies.   BEST MOMENTS: "It's like having a map in a maze. You still have to do the walking, but at least you won't bang your head into the same wall ten times before finding the exit." "Get the contract right, get it signed, and get everyone clear before any heavy lifting begins." "Clarity is key. And if you don't know what something means, get your RFI schedule going and ask questions about it." "Clear documentation equals fewer disputes when everyone knows what they're supposed to do, when to do it, and how they get paid." "Contracts shouldn't be something to fear. Think of them as a framework that, if used correctly, they protect all parties involved."   Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on. HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories. LinkedIn - www.linkedin.com/in/jacob-austin/ Instagram - www.instagram.com/qs.zone/ www.qs.zone/all-links

In episode 71 of The Subcontractors Blueprint podcast, host Jacob Austin addresses the pressing economic challenges faced by subcontractors, including rising material costs, labor shortages, and inflation. Jacob offers actionable strategies to ensure profitability and business growth despite these adversities. Key topics include effective cash flow management, strategic pricing, client base diversification, and efficient material and labor cost management. Emphasising the importance of strong contractor relationships, Jacob provides practical advice to help subcontractors navigate the current economic landscape and thrive. This episode is a must-listen for construction business owners seeking to bolster their operations during uncertain times. KEY TAKEAWAYS:  Strategies for subcontractors to survive in an uncertain economic climate.  Importance of cash flow management for profitability.  Pricing strategies to balance profitability and competitiveness.  Building strong relationships with contractors through communication.  Proactive communication and feedback mechanisms with contractors.   BEST MOMENTS: "You can have a full order book, and you can still fail if cash flow isn't your best friend." "Remembering to obtain the paperwork necessary to get your hands on retention at the right time is an easy but often overlooked issue." "Pricing in uncertain economic climates is a bit of a delicate balance." "Diversify your client base to mitigate risk in an unstable economy." "Tough times don't last, but tough subcontractors do."   Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on. HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories. LinkedIn - www.linkedin.com/in/jacob-austin/ Instagram - www.instagram.com/qs.zone/ www.qs.zone/all-links

In episode 70 of The Subcontractors Blueprint podcast, host Jacob Austin discusses the topic of retentions in the construction industry. He explains that retentions are a financial safeguard for clients, ensuring project quality and timely defect rectification. Jacob outlines the mechanics of retentions, highlighting challenges such as delayed payments and unfair terms. He emphasises the importance of understanding contractual terms, documenting work, and maintaining communication with contractors. By proactively managing retention claims, subcontractors can secure their payments and foster better relationships. Jacob's insights aim to help subcontractors navigate the complexities of retentions effectively. KEY TAKEAWAYS:  Definition and purpose of retentions in the construction industry.  Mechanics of how retentions are applied and released.  Challenges faced by subcontractors regarding delayed payments and unfair terms.  Importance of understanding contractual terms related to retentions.  Strategies for proactive management of retention claims. BEST MOMENTS: "Retentions are a form of a financial safety net for clients. They're there to offer certainty that the works are going to be finished, and they're almost like an insurance for if defects or issues arise after the project is completed." "There are rules that stipulate how retentions should be dealt with, which fall under part of the Construction Act. And one of the most important provisions of that is that payment to subcontractors cannot be tied to events in the main contract." "Retentions are often misunderstood or even resented by subcontractors. After all, from one perspective, it's money that you've earned that's being withheld, and it can be seen as outdated or punitive." "The key to getting your hands on them is to do what you're supposed to do, workwise, and be proactive about chasing up the release." "Instead of pricing retentions, focus on ensuring your contract terms are fair and enforceable, and do your bit to get your hands on the money."   Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on. HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories. LinkedIn - www.linkedin.com/in/jacob-austin/ Instagram - www.instagram.com/qs.zone/ www.qs.zone/all-links

In episode 69 of The Subcontractors Blueprint podcast, host Jacob Austin talks about the transformative role of Building Information Modelling (BIM) in the construction industry, particularly from the perspective of quantity surveyors. Jacob explains how BIM enhances efficiency, collaboration, and accuracy in measurements and cost estimation. He emphasises the importance of adopting BIM to improve information flow, decision-making, and overall project outcomes. By consolidating project data into a single digital model, BIM fosters better coordination among stakeholders and reduces errors. Jacob encourages listeners to embrace BIM for its potential to revolutionise traditional construction practices and improve project efficiency.   KEY TAKEAWAYS:  Importance of Building Information Modelling (BIM) in the construction industry.  Perspective of quantity surveyors on measurements and estimating.  Transition from traditional methods to digital models for cost estimation.  Support for facilities management through comprehensive digital models.  Challenges in implementing BIM, including cultural shifts and technology barriers.   BEST MOMENTS: "BIM is about delivering construction projects more efficiently, doing what we said we would do in the way we said we do it, and hopefully by the time we said we'd do it too." "BIM helps us to build the job before we build it, means we can get it right on the first day on the first try." "This collaborative approach reduces inefficiencies, eliminates unnecessary waste, and improves the quality of the delivered asset or building." "BIM can also help quantity surveyors stay aligned with design changes, ensuring that stakeholders are working with the most current information." "Collaboration is key; BIM thrives in a collaborative environment and quantity surveyors, designers, subcontractors, contractors must work together to develop the model that works for everybody's needs."   Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on. HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories. LinkedIn - www.linkedin.com/in/jacob-austin/ Instagram - www.instagram.com/qs.zone/ www.qs.zone/all-links

In episode 68 of The Subcontractors Blueprint podcast, host Jacob Austin provides construction business owners with essential strategies manage sub-contracting their own work. Key topics include contractual obligations, quality control, payment structures, communication, and risk management. Jacob emphasises the importance of clear communication, robust contractual protections, and diligent oversight to maintain compliance with main contractor expectations.   KEY TAKEAWAYS:  Establishing effective communication channels between main contractors and sub-subcontractors.  Strategies for ensuring quality control and compliance with industry standards.  Managing materials and payment practicalities, including retention of title clauses and avoiding factoring.  The significance of regular check-ins and open dialogue to maintain project alignment.  Managing project timelines and addressing potential delays with clear clauses and penalties.   BEST MOMENTS: "When you, as a subcontractor working for a main contractor, decide to engage a sub subcontractor, it's essential to ensure that relevant terms from the main contract are passed on downstream." "You also need to transfer program requirements, but also be mindful that in construction, it's common to see program requirements shift due to unforeseen circumstances." "Moving on to payment structures. One critical factor in managing your sub subcontractors is setting fair but protective payment arrangements to maintain cash flow." "One thing that you have to be really clear about, if you're managing sub subcontractors, is maintaining a clear communication boundary with the main contractor." "Consider developing a quality checklist tailored to the specifics of the sub subcontract tasks and sharing it with them as part of the inquiry."   Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on. HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories. LinkedIn - www.linkedin.com/in/jacob-austin/ Instagram - www.instagram.com/qs.zone/ www.qs.zone/all-links

In episode 67 of The Subcontractors Blueprint podcast, host Jacob Austin explores the crucial topic of bonds and guarantees in construction contracts. Tailored for subcontractors, Jacob explains the different types of bonds—default and on-demand—their purposes, and financial implications. He emphasises the importance of understanding bonding capacity and offers practical tips for managing bonds effectively. Jacob also discusses the significance of termination dates and parent company guarantees. This episode aims to educate subcontractors on navigating the complexities of bonds and guarantees, ensuring they protect their financial interests and thrive in the construction industry. KEY TAKEAWAYS  Definition and function of bonds as financial instruments in the construction industry.  Financial security and risk management implications of bonds for subcontractors.  Process of obtaining bonds through insurance companies and banks.  Financial implications and potential costs associated with bonds.  Practical tips for managing bonds and guarantees effectively. BEST MOMENTS: "Many subcontractors, in fact, might be more financially stable than the contractor themselves. Who's asking for that bond? And that's where understanding your options and rights around bonds can save you from taking on undue risk. "A default bond, which is sometimes called a conditional bond, is a true performance bond. It's only triggered if the subcontractor, let's say you, fails to meet your contractual obligations." "On demand bonds are typically more expensive as well due to the higher level of risk. Your bank might recommend one, but it's worth noting that this is the most onerous form of bond." "Obtaining a bond can tie up a subcontractors financial resources, and that potentially makes it harder for them to fulfil the contract in the first place." "Bonds can be modified to meet the needs of both parties, so don't hesitate to request changes if you feel certain terms could expose you to undue risk."   Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on. HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.   LinkedIn - www.linkedin.com/in/jacob-austin/ Instagram - www.instagram.com/qs.zone/ www.qs.zone/all-links

In episode 66 of The Subcontractors Blueprint podcast, host Jacob Austin speaks on the critical aspects of construction law, emphasising the significance of contracts for subcontractors. He provides practical advice on protecting your business from unwanted contractual risks by understanding contractual rights and obligations. Jacob highlights the importance of written contracts, outlines key elements that make them legally binding, and discusses various contract types. He also covers relevant UK statutes, common pitfalls to avoid, and effective dispute resolution methods. This episode serves as an invaluable resource for subcontractors navigating the complexities of construction contract law. KEY TAKEAWAYS:  Key elements that make a contract legally binding.  Relevant statutes influencing construction contract law in the UK.  Differences between express and implied terms in contracts  Common pitfalls subcontractors should avoid in contract agreements.  Importance of maintaining accurate documentation for protection. BEST MOMENTS: "There are three key elements which are the offer and acceptance, the consideration, and the intention to create legal relations." "Written contracts have the advantage of clarity. They lay out terms like payment schedules, timelines, and specific deliverables, which leaves less room for misinterpretation." "Simple contracts can be made in writing, orally, or through conduct, and they're typically enforceable for up to six years." "Express terms are specifically stated, and express terms may include further terms by reference." "Keeping documentation is one of the best tools you have for protecting yourself in a subcontract."   Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on. HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories. LinkedIn - www.linkedin.com/in/jacob-austin/ Instagram - www.instagram.com/qs.zone/ www.qs.zone/all-links

In episode 65 of The Subcontractors Blueprint podcast, host Jacob Austin covers the complexities of global claims in construction disputes. He explains what global claims are, their associated risks, and the importance of maintaining detailed records. Jacob provides strategies for both making and defending against these claims, emphasising the need for clear causation and accurate documentation. He also highlights key legal precedents and offers practical advice for subcontractors to protect their interests. This episode aims to equip construction business owners with the knowledge to navigate global claims effectively, ensuring profitability and business growth.   KEY TAKEAWAYS:  Definition and explanation of global claims in construction disputes.  Importance of maintaining detailed records for claims.  Legal principles and burden of proof in global claims.  Strategies for making and defending against global claims.  The role of causation and dominant causes in claims.   BEST MOMENTS: "A global claim lumps everything together and argues that the overall cost was caused by a combination of multiple events." "The burden of proof is still on the claimant to show that the events they're claiming for actually caused the loss." "A global claim doesn't give the other party a clear picture of what they're being held responsible for." "The best way to avoid a global claim is to keep detailed records throughout the project." "If you can break the chain of causation, the claim may fail altogether or at least be heavily reduced."   Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on. HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories. LinkedIn - www.linkedin.com/in/jacob-austin/ Instagram - www.instagram.com/qs.zone/ www.qs.zone/all-links

In episode 64 of The Subcontractors Blueprint podcast, host Jacob Austin explores the vital role of mediation in the construction industry, particularly for subcontractors. He outlines the mediation process, emphasising its benefits over traditional litigation, such as being less adversarial, faster, and more cost-effective. Key terms like BATNA, mediator, and settlement agreement are explained, alongside the mediator's role and the importance of confidentiality. Jacob also discusses the costs involved and potential outcomes of mediation, providing subcontractors with practical insights to handle disputes efficiently and maintain business health. KEY TAKEAWAYS:  Overview of the mediation process and its advantages over litigation.  Stages of the mediation process (introduction, information exchange, option generation, negotiation, conclusion).  Confidentiality aspects of mediation and its implications for parties involved.  Cost considerations for mediation, including fixed fees and potential savings compared to litigation.  Potential outcomes of mediation, including settlement agreements and non-binding conclusions. BEST MOMENTS: "Mediation works by bringing the disputing parties together with a neutral mediator who helps to facilitate communication and negotiation. The goal is for both parties to reach a mutually acceptable agreement without the need for a formal court hearing or proceedings." "And here's the best part: nothing is binding until both parties agree and sign a written settlement. That means that you can explore solutions and take risks during the process, without the fear of being locked into something that you don't agree with." "The role of the mediator isn't to decide what's right or wrong, or who's right or wrong, but to guide the process and help the parties reach a resolution in construction disputes." "Think of the mediator as a master navigator. They aren't there to make decisions and tell you where you're going to end up, but they are there to help both the parties explore all the possible decisions and solutions, and guide them along the path that they choose." "Mediation offers you a meaningful way to settle your construction disputes whilst avoiding the adversarial and lengthy procedures of litigation, and is even quicker and more cost effective than the construction industry's preferred method of dispute resolution adjudication."   Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on. HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories. LinkedIn - www.linkedin.com/in/jacob-austin/ Instagram - www.instagram.com/qs.zone/ www.qs.zone/all-links