PlumbingAfrica_April2025 Plumbing Africa | Page 13

BUSINESS AND TRAINING 11
2 . a ‘ Payment Advice ’ is a ‘ liquid document ’ in law enabling the Subcontractor to apply to the court for ‘ summary judgment ’ if no payment is received after following the procedures in the SfS ;
3 . the PCr may delay payment to Subcontractors by up to 30 days to resolve non-payment by the Employer to the PCr . ( Author ’ s comment : Unfair to the subcontractor – beware !).
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Suspension and Termination
a .
The Subcontractor may suspend
the Subcontract-works if the
Employer and / or the PCr has failed to comply with specified
A comprehensive subcontract protects you and your business .
contractual obligations ( proof of
insurance / provision of securities / or appointment of Agents etc )
best practice guidelines , yet to be published ) to resolve payment
on expiry of such Notice ;
and other technical issues speedily
b .
The Subcontractor may suspend the Subcontract-works after
III .
Arbitration - as a determination is ' final ' without going to litigation
Notice , where the PCr has failed to make payment by the
Note : Litigation is complex , time-consuming , expensive option with no
due date ;
‘ win in court ’ guarantee , a last resort .
c .
The Subcontractor may terminate the Subcontract-works where
suspension has failed to resolve a notified issue by following the
Consider that …
procedures ( SfS ) in the relevant clauses ; ( suspension is not a
a .
The building industry to a greater extent , and the civil
prerequisite to give Notice of Termination of the Subcontract );
engineering contracting firms to a lesser extent , rely on
d .
The PCr may terminate the appointment where the
Subcontractors who provide specialised construction skills –
Subcontractor has failed to perform , – or
sometimes involving sophisticated product-specific Construction
e .
The Parties may agree to terminate the appointment where
Equipment . The industry generally has a poor track record of
execution of the Subcontract-works has become impossible .
looking after subcontractors :
Note : A party in breach of the contract cannot terminate that contract .
I .
not using SfS to appoint ‘ domestic ’, ‘ nominated ’ or ‘ selected ’
Subcontractors ;
Dispute resolution
II .
issuing a letter of appointment with unilateral clauses in the
a .
Where the Parties have not resolved a disagreement , the
Contractor ’ s favour ;
aggrieved party may give Notice of Dispute to be resolved by
III .
unfair clauses include the introduction of ‘ pay when paid ’ terms ;
following the procedures in the SfC / SfS .
IV .
a Guarantee for Payment is rarely provided ;
b .
The Parties must continue to perform their obligations
V .
Performance Guarantees are generally required – often
notwithstanding any disagreement or dispute that may exist
retention is deducted – and the balance of such amounts at the
between them .
Final Account stage is not repaid .
c .
The JBCC SfS refers to “ the Employer consents to the joining of
b .
Subcontractors , for fear of losing work , accept such unfair
any Subcontractor with the PCr as a party to any proceedings ”.
employment conditions and are not offered an original unaltered
SfS to sign ( and given a reference copy ) and don ’ t form a united
Note : There is no privity of contract between the Employer and a
front on behalf of their industry :
nominated / selected Subcontractor .
c .
Application in SfC
Note : The Department of Justice in South Africa issued a directive
I .
Insist that each Subcontractor is appointed before Subcontractworks
on 03 May 2013 where the Employer is an Organ of State that
commence using an unaltered recognised SfS ,
dispute resolution procedures in a SfC | SfS must be used in
II .
Understand your obligations and responsibilities described in
preference to litigation , allowing for a settlement by :
the tender documents ,
I .
Mediation - quick and inexpensive
III .
Create and maintain a comprehensive record of all
II .
Adjudication ( provided for in the draft CIDB ' s ' prompt payment '
communications . PA
April 2025 Volume 31 I Number 02 www . plumbingafrica . co . za