Contra Charged

[sheba]

Hello. We have been contra charged to the total amount of £197,859

Could somebody please help me? we left the site as we told the company well in advance the main contractor our intentions. We was expecting a large payment due the next week, however we have been contra charged apparently for works put right by a third party.

However the main contractor has not contacted us or informed us to give us the chance to put the works right and only given us 2/3 days notice about being contra charged.

Also we was meant to sign their contract with solicitors however they never provided us with this during our time working in partnership with them.

Where do we stand as a company?

 

[Homer J Simpson]

It all depends on what the contract says and if it is all enforceable.

For that size a job I'd be speaking to a solicitor sharpish!

 

[sheba]

It all depends on what the contract says and if it is all enforceable.

For that size a job I'd be speaking to a solicitor sharpish!

Hello the contract was not signed as the main company did not ask us to sign, as somebody clearly was not doing their job.

 

[Big G]

They cant do that, they have to give you opportunity to put right any works that they believe is not up to standard 'snag list' and then you can attend site put right the issues and then you get paid.

However, this is clearly not the case and i think you do have a good dispute with this as they haven't supplied you with a snag list and any information supplied regarding your work isn't going to be sufficient now as another contract has now touch up or gone over the work you have done.

Why did you leave site in first place and was this accepted by the main contractor?

How much was they due to pay you?

 

[Michael Gerard]

I am assuming that your company is a specialist sub-contractor working for a main contractor on a construction project.

If my interpretation is correct, you were meant to sign the contract but failed to because you were not provided with the written contract. Regardless whether you signed a contract, you would have entered into a binding agreement simply on the basis of the conduct between you and the main contractor (ie you commencing work and the main contractor allowing you access and (presumably), making interim payments). However, the problem is determining what T&C’s are incorporated into your contract (expressed or implied terms or a mixture).

That said, either the Housing Grants, Construction and Regeneration Act 1996 or the Housing Grants, Construction and Regeneration Act 1996 as amended by theLocal Democracy, Economic Development and Construction Act 2009 (which one applies will depend when you entered into the contract), will be implied into your contract with the main contractor. Whichever Act applies, your contract must have an adequate mechanism for payment which means that you will be entitled to regular interim payments plus, if the main contractor wishes to make a deduction from an interim payment, it must issue a timeous notice stating the grounds and setting out the sum to be deducted. If the main contractor fails to issue such a notice on time, it cannot make any deductions (save under the old construction act where it could abate the price, ie where there are proven defects).

If the main contractor failed to make payment, you would then be entitled to issue a 7 day notice to suspend performance and if on the eighth day no payment had been made, by issuing a further notice you could suspend operations. However, my big concern is that it appears you have simply left the site without serving the requisite notices or entered into an agreement that can be evidenced (ie a signed agreement or a signed instruction from the main contractor).

I therefore suspect that the main contractor will assert that you have abandoned the work which is a repudiatory breach of contract, thus allowing it to accept the wrongful repudiation and bring the contract to an end, complete the work and pursue you for damages. In such circumstances, you are not entitled to be given an opportunity to correct any defects.

Due to the amount that is in contention, I strongly urge that you seek professional advice as quickly as possible.

If you wish to PM me or contact me via my website link for a free discussion, please feel free.