We don’t want you to be tied into impossible contracts.
Click here to watch today’s video that looks at some of the pitfalls of agreeing to use a nominated subcontractor or continue with this quick read.
What is a nominated subcontractor?
It’s when you are contracted by a client and told that you need to use specific subcontractors.
Here’s how it can go wrong…
One of our clients was told they had to use a concrete supplier close to the facility. The site was in the middle of nowhere so this made sense. They signed the contract saying they had to use this supplier.
This all sounds simple, right?
Well not always.
Sometimes the subcontractor might not even have enough supply for the project.
Or, in this case, they asked for a whopping 80% payment upfront.
The contractor found themself between a rock and a hard place because the contract said they had to use this supplier.
It ended in loans and massive cash flow issues.
What often starts off seeming like a normal arrangement often ends in big trouble.
So, what do you need to do to get around this?
As you get to the point of signing the final contract, ask to check the agreement terms with the nominated subcontractor.
They will then reach out to the nominated subcontractor or you could reach out to them for clarity.
Once you have the clarity you know what you’re in for, and you can negotiate where necessary.
REMEMBER: You need the information before you sign the contract. Make sure you understand the agreement with the subcontractor.
For more contractual advice, Quantum Contract Solutions is here to guide and assist you through everything contract related. Let’s reduce risk in your contracts and save time and money, just click this link to get our FREE case study to show you how clients just like you are doing it.