To learn everything you need to know about unfixed materials, watch this video or continue with this quick read.
Have you ever paid for really expensive materials, delivered them on site, and then not got paid for them through no fault of your own?
Maybe it was because of delays to the project and the fact your contract says you only get paid once they’re installed.
What are unfixed materials?
They are materials that have not yet been installed. So they’ve been delivered on-site but not yet utilised in the project.
Here’s a Quick Story
A couple of years ago a steel fabricator got into trouble.
Steel fabricators often have to front a lot of money because the materials are expensive.
This steel fabricator was commissioned to build a bridge.
For this bridge, they needed masses of steel, and a lot of it needed to be specialised. So not just your run-of-the-mill steel beams.
They bought roughly 7 million dollars worth of steel.
In the meantime, there were a lot of other subcontractors on site doing all of the preliminary work.
The steel fabricator’s delivered the steel according to what was stipulated in the schedule.
However, the schedule was delayed.
Because the other contractors hadn’t stuck to their deadlines the project was massively delayed.
Now according to their contract, the steel fabricators wouldn’t be paid until the materials were fixed… i.e. installed.
This meant not being able to pay back the loan they took out.
So they had to pay a huge amount of Interest on the loan every month.
Cash flow went haywire through no fault of their own.
Small errors can cost you a lot of money.
Is this an issue for your kind of company or business?
If NO then don’t worry… if YES then:
- Make sure you protect your cash flow
- Make sure you don’t lose money through no fault of your own
So How do you make sure you aren’t negatively affected by unfixed materials?
- Ask for an upfront payment for expensive materials
- Get Paid on Delivery
- Get partially paid on delivery, with the remainder being paid on completion/installation
- Paid on delivery with the provision of security
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.