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Subcontractor Payment Agreement

Subcontractor Payment Agreement Template for England and Wales

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Key Requirements PROMPT example:

Subcontractor Payment Agreement

"Need a Subcontractor Payment Agreement for a large construction project in Manchester, where we'll be making monthly payments of £50,000 to three electrical contractors starting March 2025, with specific requirements for performance bonds and retention amounts."

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Document background
The Subcontractor Payment Agreement is essential when engaging subcontractors for project delivery in England and Wales. It ensures compliance with construction legislation, particularly the Housing Grants, Construction and Regeneration Act 1996, and provides clear payment mechanisms to protect both parties. This document is crucial for managing cash flow, preventing payment disputes, and maintaining transparent financial relationships between contractors and subcontractors. It typically includes payment schedules, notice requirements, and specific conditions that must be met before payments are released.
Suggested Sections

1. Parties: Identification and details of the contractor and subcontractor

2. Background: Context of the agreement and relationship to main contract

3. Definitions: Key terms used throughout the agreement including relevant legislation references

4. Scope of Works: Detailed description of subcontractor's obligations and deliverables

5. Payment Terms: Payment amounts, schedule, mechanisms, and compliance with Construction Act requirements

6. Duration: Timeframes, completion dates, and programme requirements

7. Performance Standards: Quality requirements, acceptance criteria, and compliance with industry standards

8. Health and Safety: CDM regulations compliance and safety requirements

9. Variations: Process for handling changes to scope or requirements

10. Termination: Conditions for contract termination and consequences

11. Dispute Resolution: Procedures for resolving disputes including statutory adjudication rights

Optional Sections

1. Insurance Requirements: Specific insurance obligations beyond standard provisions

2. Bonds and Securities: Performance bond requirements for high-value or high-risk projects

3. Intellectual Property: IP rights and ownership provisions for design or creative work

4. Data Protection: GDPR compliance and data handling requirements where personal data is processed

5. Modern Slavery Compliance: Supply chain and labor law compliance requirements for larger contracts

Suggested Schedules

1. Schedule of Rates: Detailed breakdown of agreed rates and prices

2. Scope of Works Schedule: Detailed technical specifications and requirements

3. Programme of Works: Detailed timeline and milestones

4. Payment Schedule: Detailed payment terms, mechanisms and notice requirements

5. Insurance Certificates: Copies of required insurance documentation

6. Form of Payment and Pay Less Notices: Standard forms for payment notices required under the Construction Act

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈË°æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
Relevant legal definitions






























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Industries

Housing Grants, Construction and Regeneration Act 1996: Key construction legislation governing payment provisions, adjudication rights, payment notice requirements, and prohibition of pay-when-paid clauses in construction contracts

Late Payment of Commercial Debts (Interest) Act 1998: Regulates statutory interest rates, compensation for late payments, and payment terms in commercial transactions

Construction (Design and Management) Regulations 2015: Covers health and safety responsibilities and specific duties of contractors and subcontractors in construction projects

Supply of Goods and Services Act 1982: Establishes quality of service requirements and obligations for reasonable care and skill in service provision

The Scheme for Construction Contracts (England and Wales) Regulations 1998: Provides default payment provisions and adjudication procedures for construction contracts

Value Added Tax Act 1994: Outlines VAT requirements and tax implications for payments in construction contracts

Unfair Contract Terms Act 1977: Governs the reasonableness of contract terms and limitation of liability clauses in commercial agreements

Construction Industry Scheme Regulations: Sets out tax deduction requirements, verification procedures, and payment reporting obligations for construction industry payments

Modern Slavery Act 2015: Ensures supply chain compliance and proper labor law considerations in construction contracts

Data Protection Act 2018: Regulates the handling of personal data and privacy considerations in commercial relationships

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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