Deductions on existing contracts cannot be applied without the subcontractor's agreement 
(07/04/2008)
Leading house builders including Taylor Wimpey, Barratt and David Wilson Homes have advised their sub-contractors and suppliers that they intend to reduce prices/contract sums by between 3 and 5%. The intention is to apply deductions to both existing contracts as well as future tenders.
The ECA has advised its members that these deductions should not be applied to payments on existing contracts. Such deductions would not be contractual and therefore cannot be applied without the subcontractor’s agreement.
Members should respond to such notifications in writing clearly stating that they do not agree to the deductions and will respond to any unauthorised reduction in payment in accordance with the relevant terms and conditions of contract and/or provisions of The Housing Grants Construction and Regeneration Act (Construction Act).
Related categories: Legislation and regulation
