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CON4541 CONSTRUCTION CONTRACT MANAGEMENT

4. Contract Administration (refer Private Standard Form with Quantities for HK)
Contd

H. Assignment and Sub-letting (Clause 19)

Assignment ,

Assignment occurs when a right or duty is legally transferred from one party to
another

After the transfer, the original party retains no interest in the right or duty
transferred.

Reason to assign a contract

A contractor may assign his right to payment to a third party in return for
money up front in order to enable him to carry out the contract

An employer may assign his right to the completed building to another party
for payment.

Requirement of the Contract

Neither the Employer nor the Contractor may assign or transfer the Contract to
the benefit of another party without the written consent of the other.

With exception that after Substantial Completion of the Works the Employer
may assign or transfer the whole or part of the benefit of the Contract without
the consent of the Contractor.

Contractor shall not allow for assigning nor arranging for vicarious
performance of his obligations for organization, management, planning,
supervision and co-ordination through the functions of site management and
supervisory team.

Vicarious Performance - Complete performance of a contract through a


third-party (such as a subcontractor) where the contract requires personal
performance.

@VTC 2013 - Page 1 of 2 -


CON4541 CONSTRUCTION CONTRACT MANAGEMENT

Sub-letting

Sub-letting is quite different from assignment.

It is the delegation () rather that the transfer of a duty

If a main contractor sub-lets plumbing work to a sub-contractor, the main


contractor remains responsible if the plumbing sub-contractor fails to perform
or perform badly.

Therefore, sub-letting of a part of the Works to a Domestic Sub-Contractors


does not relieve the Contractor from any liability or obligation under the
Contract. The Contractor is still fully responsible under the Contract
irrespective of default by the Domestic Sub-Contractor.

Requirement of the Contract

Contractor shall be permitted, unless expressly prohibited by the Contract, to


sub-let (or sub-contract) a part of the Works

Contractor is not allowed to sub-let the whole of the Works or substantially the
whole of the Works.

If required by the Architect, the Contractor shall submit a plan of his


sub-contracting arrangement giving names of his key sub-contractors with
their scope of works and particulars.

Contractor shall not sub-let any part of the Works to a sub-contractor against
whom the Architect has made an objection giving his reasons.

If instructed by the Architect, the Contractor shall remove any sub-contractor


from the Works.

@VTC 2013 - Page 2 of 2 -

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