[ Contracts: Legal advice ]
design and mobilisation of your site offi ces’ then that is all the letter will provide security for. Often the letter will state, ‘start the works and continue to a budget limit’. It is important to keep the customer aware of the growing costs of the work and the value of any committed outlay – for example, orders placed on any expensive items or items with long delivery periods. The question is unclear about who has issued the letter. If it is ‘the client’, then until the letter of intent contract is ended, presumably by agreement, and is replaced by another contract, then the recipient subcontractor is under no duty to work for the main contractor. If it is the main contractor who is responsible for the letter of intent, the subcontractor should be clear what the effects are of the client and main contractor failing to agree terms.
We are employed by a local company as its electrical subcontractor. The purchase order states: ‘payment will be 30 days
after the value has been certifi ed under the main contract’. We have not received any money for two months and we want to use the debt collection agency.
Sometimes subcontractors struggle to know exactly what it is that they are owed. The terms and
conditions of a purchase order seldom cater for all those matters a traditional subcontract order should regulate, and often the payment mechanism is defi cient. The Scheme for Construction Contracts will replace those parts that fall short, but it may take a threat to invoke the adjudication provisions before the matter is resolved. The ECA Debt Recovery service is most usefully deployed when the value of the debt is clear and where there is no question as to the quality of workmanship, ‘contra-charges’, or delays. Meet the person whose responsibility it is to make the payment. Check the application is acceptable and remind them of the need for a payment notice. Ask them to reinstate a regular fl ow of money. Information gathered at this meeting will determine how best to proceed.
Your questions answered:
If you have any legal queries or would like your questions answered in ECA Today, please email us at
mail@ecatoday.co.uk ECA members can receive free advice on commercial
contract and legal issues from the ECA Commercial Contract and Legal department by calling 020 7313 4818.
Looking for the week spot
Mrs Jones has asked me to come in and replace her fuse board. I have told her the price and she has written to me confi rming the start date. We could do with the work, so we start tomorrow. We have heard of ‘The Door Stepping Regs’ but we have a contract in writing, is that all right?
No, it is not. While having a written contract is an admirable fi rst step, ‘The Door Stepping Regs’ or to give them their correct title: ‘The Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008’, state that
a consumer must receive a written notice of their right to a seven-day cooling-off period. It is this that provides the obligation to pay. The Regulations even state what form the words must take. The consumer has the right to waive their right to the cooling-off period but if the contractor wishes to protect themselves, the waiver must also be in writing. Breach of the Regulations is a criminal offence, punished by a £5,000 fi ne. The Commercial, Contracts and Legal advisers can help or the Association’s Manual item 3.42.09 details the full extent of the requirements.
Summer 2010 ECA Today 53
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