Wise Up Wednesday: Would You Ignore Being Ripped Off?

​Imagine you are in the supermarket and your favourite wine is advertised at 50% off, you put a half a dozen bottles into your trolley (whilst your partner isn’t looking), but when you get to the checkout the price you are charged shows that you only got the 50% discount on one bottle.

You query it with the cashier, only to be told that “you need to read the small-print on the advertisement”. Would you just accept it and pay up regardless?

No. I didn’t think so!

If you are like most of us you would be checking that ad and asking to see the manager and having a right go about it.

So why don’t Specialist Contractors adopt the same mentality when their business is being ripped off by onerous terms?

Not all contracts are the same, and onerous terms are there waiting to rip off the unwary. You will usually find them lurking in the depths of Contractor’s own “non-standard” documents,  but they can also arise as amendments to Standard Form contracts.

These terms are deliberately designed to reduce your entitlements and increase your obligations. They will certainly make your life more difficult, they could end up costing you a substantial amount of money, and in the worst case scenario they may even cost you your business!

The simplest way to put onerous terms into context is to ask yourself this question; “Why, when there are all manner of Standard Form contracts around such as JCT, NEC and MF/1, does anyone need to produce their own terms?”.

The simple answer is that it isn’t for your benefit!

So, what are the things you need to look out for? Here are some examples;

(a)          Extended payment periods

(b)          Long notice period before you are allowed to suspend performance

(c)           Pay when certified (unlawful in contracts to which the Construction Act applies)

(d)          Extended fixed price periods

(e)          Non-payment for unfixed materials

(f)           Excessive discount

(g)          Discount not linked to prompt payment

(h)          Excessive retentions and/or prolonged repayment periods.

(i)            Onerous set-off  and cross contract set-off clauses

(j)           Acceleration without payment

(k)          Vague programme information.

(l)            Design fitness for purpose obligations

(m)         Open ended co-ordination obligations

(n)          Restricted rights of recovery on variations

(p)          Protection of your  works

(q)          Client’s milestone dates for access

(r)           Excessive liquidated damages

(s)           Restricted extension of time entitlements

(t)           Restricted loss and expense entitlements

(u)          Delay notice periods made a condition precedent

(v)          Adjudication entitlements restricted or delayed

(w)         Costs of adjudication to be paid by the Sub-Contractor

(x)          Other Construction Act abuses​

Don’t Allow Onerous Conditions Into The Contract!

Obviously the best time to find out about onerous provisions is at the enquiry stage before you have even submitted your price. You should always be clear about the terms and conditions you will be working under if your tender is successful.

If you don’t know or don’t have time to find out about terms and conditions you should always qualify your tender. For example you could qualify it by saying something to the effect of

“Our price is based on the assumption that an appropriate JCT Standard Form of Sub-Contract will be used and subject to agreement of all necessary details to enable Articles of Agreement to be completed”

Or

“Our offer is subject to the agreement of appropriate terms and conditions and we have not priced the risk of entering into any onerous or non-standard form of agreement”

If your tender is successful then you will be invited to enter into a contract or possibly sent an Order or Contract to sign. This is a very dangerous time because a contract, including the onerous provisions could easily come into being!

The first line of defense lies is recognising onerous terms and conditions in the first place. Whilst you may be tempted to ignore the small print, you may subsequently find that a contract has come into force incorporating onerous terms which have fatal consequences for your business.

You need to act quickly and carefully. Don’t think that you can start work, even design work or ordering materials, and just because you haven’t signed the contract everything will be all right. It won’t!

The contract conditions should be carefully checked, particularly if they are contained in a completely non-standard form. Beware too of contracts that purport to be Standard Forms but then have pages and pages of amendments.

Unfortunately, you also have to be wary of clauses that are not there, as well as checking the ones that are!

For instance, if you are designing the works and the contract is silent about design liability, then you will have a very onerous “fitness for purpose” obligation. This is much worse than it sounds because you are literally guaranteeing your design will satisfy the Employer’s needs irrespective of what you knew or didn’t know about his business or industry.

In order not to be caught by onerous provision you must make it perfectly clear that you are rejecting their onerous terms. Notice I said rejecting their terms, not rejecting their order.

There may be times when you have to take a commercial decision to accept onerous terms and conditions of contract.  In this situation you need to be very clear about the risks you are running and manage them accordingly.

I hope you enjoyed this week’s Wise Up Wednesday.

If you are in any doubt about whether or not the terms and conditions are onerous you need to take professional advice and StreetwiseSubbie’s Nationwide Network of Consultants are experts in helping you to deal with such matters. If you need help, you can call us for initial free advice on 01773 712116.

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New Year – New Payment Nightmares?

Some of the commentators say construction is still on the up, some say the bubble has burst. Whichever view you subscribe to, we know that many Specialist Contractors are still experiencing Payment Nightmares!

  • “Underpayment without reason”
  • “Pay when paid and if certified”
  • “Spurious contra charges with no prior notice and no detail”
  • “Unpaid applications in excess of 6 months”
  • “Contractors ignore you, even after repeated threats of legal action”
  • “Even large contractors who used to pay on time hold onto payments”
  • “Contractors use you to bankroll the contract”
  • “They screw you to maintain their margins”
  • “Contractors that are in adversarial mode from day one!”
  • “CIS deducted incorrectly and not paid back”

I’m sick and tired of seeing good hard working Specialist Contractors like you suffering at the hands of the non-paying, arrogant, bully boy Contractors!

So What’s To Be Done About It?

If Specialist Contractors are ever going to receive the returns that your hard work and efforts deserve, effective action needs to be taken at grass roots level.

So please;

if you haven’t yet downloaded your free “How To Get Paid” report you can do it now here; “How To Get Paid”

  • come and join the debate with 2,178 Specialist Contractors in our FREE LinkedIn Group: FREE LinkedIn Group
  • already in the group? Then please spread the word to every other Specialist Contractor you know and forward this email to them
  • in a Trade association? Why not get in touch and see how we can link up
  • think more should be being done or got some ideas? Please get in touch
  • Buddies, please make sure to use the initial free advice and free Consultancy resources at your disposal.
  • let us help you to protect and grow your business,
  • and if you’re not yet a member why not email us at info@streetwisesubbie.com for details?

Because, together we can make a real difference!

I hope you enjoyed my blog post and that it gave you some food for thought, and I sincerely hope to speak with you soon.

In the meantime if you need any help with any of your business issues, please don’t hesitate to pick up the phone and give us a call on 01773 712116.

Wise Up Wednesday: Subbies Robbed of £8m

Specialist Contractors and suppliers have just been robbed of another £8million!

According to the liquidator’s report, Kent based Contractor Allston Construction owed trade contractors and suppliers £8m when it ceased trading!

That’s a staggering amount of money to take from its Sub-Contractors and suppliers on a turnover of around £11million!

So, if you are not getting paid properly then don’t fall for the Contractor’s BS, because it is highly likely (there are some exceptions), that what they are telling you is a pack of lies.

Please don’t stand for late or underpayment.

Take action!

Take action to safeguard your business from the catastrophic impact of reduced, late, or non-payment in 2016.

If you don’t then it could cost you your business!

Unscrupulous Contractors use every trick in the book, to reduce and delay payments. Specialist Contractor’s efforts to avoid or rectify this problem often come too late in the process.

Don’t be one of the casualties, take action now.

Download “How To Get Paid” for free right now, and put an end to reduced, late and non-payment!

Whatever level your business is at, I want to encourage you to experience and enjoy a better more profitable, less stressful way.

I hope you enjoyed my Wise Up Wednesday blog post and that it gave you some food for thought, and please don’t hesitate to grab your Free Report at “How To Get Paid”  and if you need any help with any of your business problems pick up the phone and give us a call on 01773 712116.

Wise Up Wednesday: Will 2016 Be Better Than 2015 for UK Construction?

Will 2016 Be Better Than 2015 for UK Construction?

Happy New Year!

For most Specialist Contractors the last couple of weeks have been a very important time of the year.

First, for many it’s one of the few proper breaks you get with a lot of sites closed over the Christmas break. I hope you got time to enjoy the results of your efforts in 2015, or chill out, relax and reflect on things if it wasn’t such a great year.

How To Make 2016 Better Than 2015

The break between Christmas and New Year – is also a great time where we can take a step back and really start to plan for the year ahead.

Most business owners hope for a successful new year. Those who achieve it have put some serious thought into how it’s going to happen.

For the smart Specialist Contractors 2016 could be a bumper year, but for those that don’t wise up it could be a very dangerous year indeed!

So, here’s your opportunity to be one of those smarter Specialist Contractors and discover those secrets that will ensure your business success…

7 Key Secrets That Will Ensure You Have A Happy Successful 2016

1 Know who you are working for! Watch out for companies acting as agents, dormant companies, companies of straw and companies registered in other jurisdictions.

Some of the biggest companies including Balfour Beatty use these types of arrangement, and they can create real obstacles when you try to get paid.

2 Understanding your obligations. Understanding the how, what, when, were and extent of your liability is crucial to ensure that it doesn’t come back to bite you!

Watch out for dubious “value engineering” practices and make sure that you check the contract thoroughly to ensure it reflects what has been agreed..

Yes it’s a pain and yes it can be tricky, but if you’re not sure get good advice. Our experts can check contracts quickly and cost effectively, so give us a call.

3 Not all contracts are the same! If you don’t recognise the onerous terms of the contract you are highly likely to be one of the business failures of 2016!

You may not be surprised to hear that most contracts we check for Specialist Contractors are stuffed full of onerous terms and conditions.

But, what may surprise you is how often we can get onerous terms taken out or amended, and get the Contractor to agree to fair and reasonable terms.

4 Don’t create your own problems! Make sure that you don’t fall into the Contractor’s trap of taking no action when problems occur. Or they will steal your money to make their profit margin!

Please do not fall for their – “no need to be contractual” B.S.

Sorry, but there is every need to follow the contract, and if they interpret that as being “contractual” then so be it. You can be sure they will be “contractual” if you step out of line!

5 Price, profit and promotion. How to make sure you are one of the success stories of 2016.

Trust me, we make “marketing” simple. Yes there is a lot of B.S. out there about marketing, and most of the books on the subject make my brain hurt!

And if you think getting on a tender list is all there is to it, then sorry to burst your bubble but almost anyone can do that. After all how much does it cost a Contractor to send you an enquiry? Basically nothing, so the Contractor doesn’t care how many he sends out…

But, getting the right kind of enquiry, from the right Contractor, and marketing your business for maximum profits is easy with our help and advice – we can even do it all for you.

6 How to get paid! I reckon the biggest single challenge that you faced in 2015 was getting paid. And I’m sorry to break this to you, but making sure you get paid on time every time, and what you are owed, is going to be a major challenge in 2016 too!

Whilst this time of year can be relaxing, it can also be extremely stressful, as tight fisted Contractors hang on to your money over the Christmas period and into the New Year.

There are weapons in your armoury that you probably don’t even know you’ve got, so don’t stand for late or underpayment. Take action!

We can sort the late payers out for you, just give our team a call on 01773 712116.

7 Take action! Learn how to take action to ensure your success in 2016.

Whatever level your business is at, I want to encourage you to wonder if there’s something more.

More to know, more to learn, more to experience and enjoy and be.

A better more profitable, enjoyable, less stressful way.

But, unfortunately what got you here won’t get you there!

Because the old adage that “if you always do what you have always done – you will always get what you’ve always got” is so very true!

So, if you have had a tough time for the last few years, and yet you still keep working with the wrong kind of Contractors or Clients who will sap your strength and steal your profits, then maybe it’s time for a new approach.

I hope you enjoyed my Wise Up Wednesday and that it gave you some food for thought, and I sincerely hope to speak with you soon, so if you need any help with any of your business problems, please don’t hesitate to pick up the phone and give us a call.

In the meantime may I take this opportunity to wish you a very Happy Healthy and Successful New Year!