Construction Law and Dispute Resolution in the Firm Essay

Construction Law and Dispute Resolution in the Firm - Essay Example In all given circumstances the sub contractor is expected to oblige the stipulations of another entity’s contract. Based on the business conditions or other such stipulations the sub contractor may assume many forms through which he fulfils the instilled obligations of the Employer or main Contractor. In most given circumstances the sub contractor is hired by a general contractor in order to execute specific project objectives. The general contractor generally pays out the sub contractor as per accepted conditions. A general or main contractor may also hire sub contractors in order to mitigate project risks or to reduce the costs. Using this approach the general or main contractor is able to provide better service through lowered costs along with lowered risk on their part. In general construction practice the sub contractors in question are often employed by the same general or main contractors allowing the sub contractor to develop essential expertise. However, there are dif fering legal stipulations when it comes to dealing with different forms of contractors. These can be better understood if the types of sub contractors are classified. This text will attempt to discern the change when a domestic subcontractor is changed into a nominated subcontractor as per the UAE Civil Code and English common law. 2. Sub Contractor Types Sub contractors can be classified in a number of ways but this text will consider classification based on the JCT standard form of contracts1 because the FIDIC method of classifying sub contractors is rather limited. The classified types of sub contractors are2: Domestic subcontractor is any subcontractor who enters into contract with the main contractor in order to provide any goods or services that were required under the main contract. These subcontractors can be seen as employees of the main contractor. Nominated subcontractor is any subcontractor who has been approved of by recommendation from the Engineer, Designer or Archite ct. The main contractor is nonetheless allowed to profit from these subcontracts even if approval stems from the original Employer’s end. Furthermore, the main contractor is responsible for providing the subcontractor attendance including water and power along with other required amenities. Typically the nominated subcontractor is a direct employee of the original Employer. Named subcontractors are effectively the same as domestic subcontractors and are beyond the scope of this discourse. What is the level of liability of the subcontractor? According to the FIDIC red book’s Clause 4.43, the subcontractor cannot be provided with the entire contract for work agreed between the Employer and the main Contractor. If this were done then it would become hard to differentiate between the legal status of the main contractor and the subcontractor. Furthermore, if this were the case then the contention behind subcontracting to minimise risk by distributing it would be lost altoge ther. Thus it can be positively be identified that subcontracting involves transfer of risks as per the dominant view on the issue. However, as per Clause 4.4 of the FIDIC red book the Contractor â€Å"shall be responsible for the acts or defaults of any Subcontractor†4.