JCT INT Sub-Contractor Guide

Guide 2011
Intermediate Sub-Contract
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Guide 2011
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2011
INTERMEDIATE BUILDING CONTRACT
SWEET & MAXWELL
Intermediate Sub-Contract Guide (ICSub/G)
This Guide is intended to provide a general introduction to the contract and is not a substitute for professional advice.
Published September 2011 by Sweet & Maxwell, 100 Avenue Road, London NW3 3PF
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© The Joint Contracts Tribunal Limited 2011
www.jctcontracts.com
Contents
Introduction Page 1
General
Purpose of the 2011 editions
Content of the Guide
Sub-Contracting under IC and ICD 2011 4
Consent to domestic sub-contracting

Conditions of sub-contracting
Sub-contract tendering – information requirements
Agreement 6
General 6
Recitals 6
Articles 7
Sub-Contract Particulars 7
Attestation 10
Schedule of Information 11
Conditions 12
General 12
Section 1 – Definitions and Interpretation 12
Definitions (clause 1·1)

Effect of Final Payment Notice (clause 1·8)
Section 2 – Carrying out the Sub-Contract Works 13
Sub-Contractor’s general obligations (clauses 2·1 to 2·3)

Compliance with the Main Contract and indemnity (clause 2·4)
Supply of Documents, Setting Out etc. (clauses 2·5 and 2·6)
Errors, Discrepancies and Divergences (clauses 2·7 to 2·10)
Unfixed Materials and Goods (clause 2·11)
Adjustment of Period for Completion (clauses 2·12 and 2·13)
Practical Completion and Lateness (clauses 2·14 and 2·15)
Defects (clauses 2·16 and 2·17)
Collateral Warranties (clause 2·18)
Sub-Contractor’s Design (clauses 2·19 and 2·20 – Design version)
Section 3 – Control of the Sub-Contract Works 16
Assignment and Sub-contracting (clauses 3·1 to 3·3)

Contractor’s directions (clauses 3·4 to 3·8)
Opening Up and Remedial Measures (clauses 3·9 to 3·13)
Attendance (clause 3·14)
Health and Safety and CDM Requirements (clauses 3·17 and 3·18)
Suspension of Main Contract by Contractor (clauses 3·19 and 3·20)
Benefits under the Main Contract (clause 3·22)
Certificates under the Main Contract (clause 3·23)
© The Joint Contracts Tribunal Limited 2011 ICSub/G 2011 Page i

Section 4 – Payment 18
General
Sub-Contract Sum and Sub-Contract Tender Sum (clauses 4·1 to 4·6)
VAT and CIS (clauses 4·7 and 4·8)
Interim payments (clauses 4·9 to 4·12)
Sub-Contractor’s right of suspension (clause 4·13)
Final Payment (clause 4·14)
Fluctuations (clause 4·15)
Loss and Expense (clauses 4·16 to 4·19)
Section 5 – Valuation of Work and Variations 20
General (clauses 5·1 and 5·2)

The Valuation Rules (clauses 5·3 to 5·8 – and clause 5·9 in ICSub/D)
Section 6 – Injury, Damage and Insurance 21
Injury to Persons and Property (clauses 6·2 to 6·5)

Insurance of the Works and Site Materials (clauses 6·6 to 6·9)
Joint Fire Code (clauses 6·10 to 6·12)
Professional Indemnity Insurance (clauses 6·14 and 6·15 of the Design version and clause 1·4·4 of
ICSub/NAM/E)
Section 7 – Termination 22
Rights of termination (clauses 7·4 to 7·6 and 7·8 to 7·10)

General provisions (clauses 7·1 to 7·3)
Consequences of termination (clauses 7·7 and 7·11)
Section 8 – Settlement of Disputes 23
Mediation (clause 8·1) and ADR

Adjudication (clause 8·2)
Arbitration (clauses 8·3 to 8·8) and litigation (Article 6)
Schedule 1 – Form of Bond 24
Schedule 2 – Fluctuations Option(s) 24
Schedule 3 – Supplemental Sub-Contract Provisions 24
Appendix A – ICSub 2011 changes 27
Appendix B – Specimen Activity Schedule 29
Appendix C – Named Sub-Contract Procedures under IC and ICD 2011 30
Appendix D – ICSub and ICSub/D User Checklist 33
Appendix E – Related Publications 38
Page ii ICSub/G 2011 © The Joint Contracts Tribunal Limited 2011

Introduction
General
1 This edition of the Intermediate Sub-Contract Guide has been issued in conjunction with the 2011 editions of the
Intermediate Building Contract (IC and ICD 2011) and the Intermediate Sub-Contracts (ICSub 2011).
2 The Guide covers all three Intermediate Sub-Contracts, namely:
• Intermediate Sub-Contract (ICSub);
• Intermediate Sub-Contract with sub-contractor’s design (ICSub/D); and
• Intermediate Named Sub-Contract (ICSub/NAM).
3 In terms of intended use:
• ICSub is for domestic sub-contracts where the sub-contractor has no design responsibilities. It can be used
both where the main contract is IC 2011 (i.e. where the Contractor also has no design responsibilities) and with
ICD 2011 (where there is a Contractor’s Designed Portion but its design is not a matter for the sub-contractor
in question).
• ICSub/D (also referred to in this Guide as the Design version) is for domestic sub-contracts, for use in cases
where there is a Sub-Contractor’s Designed Portion.
• ICSub/NAM, the Named Sub-Contractor version, is for use where a sub-contractor is named by the Employer
or Architect/Contract Administrator in accordance with either of the procedures set out in clause 3·7 and
Schedule 2 of IC and ICD 2011. (A note on those procedures forms Appendix C to this Guide.) Use of those
procedures under ICD 2011 is not appropriate for work within the Contractor’s Designed Portion but they may
be used for a Named Sub-Contractor under both IC and ICD 2011 in respect of any other part or parts of the
Works, whether or not the Named Sub-Contractor has design obligations in respect of all or some of his work.
Each version can be used when the Main Contract Works are to be carried out in Sections and each version can be
used either:
• where the Sub-Contractor is to be paid a lump sum, adjustable for variations etc.; or
• where there is an agreed Tender Sum but the sub-contract works are to be subject to complete
remeasurement.
4 ICSub and the Design version each comprise two documents, a Sub-Contract Agreement and Sub-Contract
Conditions (ICSub/A and ICSub/C; and ICSub/D/A and ICSub/D/C, respectively). The Named Sub-Contractor
version comprises an Invitation to Tender, Tender and Sub-Contract Agreement, which are all contained in a single
document, and its own Sub-Contract Conditions (ICSub/NAM/C); to complete the Named Sub-Contractor
documentation there is also the Intermediate Named Sub-Contractor/Employer Agreement (ICSub/NAM/E) which
the Employer should generally require the Named Sub-Contractor to enter into. (In this Guide, unless the context
requires otherwise, references to the Agreement and Articles are to the Sub-Contract Agreement and its Articles;
references to Conditions are to the Sub-Contract Conditions and references to sections, clauses and Schedules
are to those parts of the Conditions.)
Purpose of the 2011 editions
5 The principal purpose of the 2011 editions of ICSub, ICSub/D and ICSub/NAM, and of the JCT range as a whole, is
to reflect the coming into force of the amendments to the Housing Grants, Construction and Regeneration 1996
(‘the Construction Act’) made by the Local Democracy, Economic Development and Construction Act 2009 insofar
as they relate to payment terms and payment-related notices. (The amendments relating to adjudication do not
require any changes in JCT contracts or sub-contracts.)
6 In ICSub, ICSub/D and ICSub/NAM 2011, the Construction Act amendments necessitate changes in the Payments
and Notices sub-section of section 4 (Payment), together with the other minor amendments referred to below. The
two principal provisions that necessitate those amendments to section 4 of the Conditions are the new sections
110(1A) and 110B that have been inserted in the Construction Act.
© The Joint Contracts Tribunal Limited 2011 ICSub/G 2011 Page 1

Section 110B
7 This section operates to give some legal standing to Sub-Contractors’ payment applications where the Contractor
himself fails to give a payment notice within 5 days of a due date for payment, though their effect is still subject to
any withholding notice (or, as now ‘pay less’ notice) that the Contractor may give in due time.
Section 110(1A)
8 Subject to that optional provision, the due date for interim payments remains the normal monthly date. However,
both the final interim payment (on which the percentage amount retained by the Contractor under clause 4·10·1
becomes due for release) and the final payment itself were related to the issue of the certificate of making good
under the Main Contract. Section 110(1A) provides that the requirement for an adequate payment mechanism
under the Construction Act is no longer satisfied where a payment or its timing is conditional on performance under
another contract, i.e. (in the case of the Sub-Contract) where conditional on Main Contract events that are outside
the Sub-Contractor’s control.
9 There are various formulae that could be adopted to deal with this situation; none are ideal. In the event, JCT
considered that a practical approach would be to provide for a single fixed Final Release Date and, assuming the
sub-contract works as a whole are then complete, for the retained percentage to be released at the next due date
thereafter or (if later) following the date at which any defects in that work have been rectified.
10 As a corollary of that, there is a minimum overall level below which no amount is to be retained (or any lesser
residual amount should immediately be released).
Related Changes
11 The amendments to the Construction Act also:
• give Contractors and Sub-Contractors an express statutory right to recover costs and expenses incurred
through exercise of their existing statutory right of suspension for non-payment; and
• make minor consequential changes desirable in the section 7 termination payment provisions and definition
of insolvency.
The right to costs and expenses was previously covered by JCT under the umbrella of loss and expense. In view of
the different terminology used in the Construction Act, it is now dealt with in section 4 under a separate head
(clause 4·13·2).
12 As a consequence of final payments to Sub-Contractors being decoupled from the Main Contract timetable for
issue of the Final Certificate, amendments have been made in clause 1·8 (Effect of Final Payment Notice) to avoid
situations where a Contractor might be unable to recover from his Sub-Contractor a later claim by the Employer
that relates to matters within that particular sub-contract.
13 The concept of the Minimum Retained Amount has been introduced in clause 4·9·4 and the Sub-Contract
Particulars (item 7 (item IT12 in ICSub/NAM)). As a result, minor additional provisions have been included in the
Defects sub-section at clause 2·16.
Content of the Guide
14 Following this introductory section, the Guide contains a general note on sub-contracting under IC or ICD 2011 and
then reviews the provisions of the Sub-Contracts sequentially, starting with the Agreement, followed by the
Conditions.
15 So far as is practicable all versions of the Sub-Contract are dealt with together. The format of the Named Sub-
Contract Agreement is necessarily somewhat different from the Agreements for the other two versions and there
are certain additional clauses in the Conditions for the Design and Named Sub-Contract versions to deal with
design-related matters, but the clause numbers of corresponding provisions in the ICSub and Design version
Conditions are the same and there are only very minor variations in the numbering of the Named Sub-Contract
Conditions.
16 The commentary on the Agreement and Conditions is followed by:
Appendix A – ICSub 2011 changes
Appendix B – Specimen Activity Schedule
Appendix C – Named Sub-Contract procedures under IC and ICD 2011
Page 2 ICSub/G 2011 © The Joint Contracts Tribunal Limited 2011

Appendix D – ICSub and ICSub/D User Checklist
Appendix E – Related Publications.
17 Appendix D is a straightforward listing, by reference to relevant provisions of the Sub-Contract Agreements, of the
information and decisions on options required to complete the ICSub and ICSub/D Agreements.

Sub-Contracting under IC and ICD 2011
Consent to domestic sub-contracting
18 In the case of domestic sub-contracts, i.e. those where ICSub or ICSub/D, the Design version, is to be used, the
Contractor is obliged by clause 3·5 of the Main Contract Conditions to obtain the Architect/Contract Administrator’s
consent to any sub-contracting of the Works or of any part of them and also, in the case of sub-contracting where
the Main Contract is ICD, if the Contractor wishes to sub-contract the design of the Contractor’s Designed Portion.
Those consents are not to be unreasonably delayed or withheld, but failure to comply with clause 3·5 is under
clause 8·4 of those Conditions a default that may entitle the Employer to terminate the Contractor’s employment.
19 The requirement for consent does not of course apply to the sub-contracting to a Named Sub-Contractor of the
work designated for him in the Main Contract Documents or in the relevant instruction under Schedule 2 of the
Main Contract Conditions. As indicated above, a note on the IC and ICD Named Sub-Contract procedures is set
out below in Appendix C.
Conditions of sub-contracting
20 In addition to obtaining consent for domestic sub-contracting, the Contractor is also required to observe clause 3·6
of the Main Contract Conditions. The clause imposes certain requirements in relation to the terms of sub-contracts.
All three versions of the Sub-Contract as printed fulfil the requirements.
21 Under clause 3·6·1 of the Main Contract Conditions, the sub-contractor’s employment under the sub-contract is
required to terminate immediately the Contractor’s employment terminates under the Main Contract. Under clause
3·6·2, the sub-contract is also required to provide:
• that no Site Materials are to be removed from site without the Contractor’s and Architect/Contract
Administrator’s consent (which is not to be unreasonably delayed or withheld);
• that where the value of any sub-contractor’s Site Materials is included in an Interim Certificate under which the
Contractor has been paid the amount properly due, those Site Materials become the Employer’s property;
• that if the Contractor pays the sub-contractor for Site Materials before their inclusion in an Interim Certificate,
they then become the Contractor’s property;
• for rights of access to the sub-contractor’s workshops or other premises similar to the rights granted by the
Contractor;
• for cross-undertakings between the Contractor and sub-contractor in respect of CDM Regulations;
• that in respect of amounts due to the sub-contractor but not paid by the final date for payment, the Contractor
is liable for simple interest at the Interest Rate;
• for the grant of sub-contractor collateral warranties required by the Main Contract within 14 days of written
request.
Sub-contract tendering – information requirements
22 To obtain tenders or negotiate sub-contracts under ICSub and the Design version, it is suggested that the
Contractor should send prospective sub-contractors the appropriate Agreement completed as far as is practicable,
together with:
• the documents showing or describing the Sub-Contract Works (i.e. drawings, specifications, bills of quantities
and/or work schedules);
• in the case of the Design version, the Contractor’s Requirements for the Sub-Contractor’s Designed Portion;
and
• any other annexes or information directly relevant to the proposed sub-contract.

23 The other annexes and information should include:
• schedules of modifications, both to the Main Contract and any which the Contractor intends to make to the
sub-contract;
• any other conditions relevant to the Sub-Contract Works, e.g. site regulations;
• the requirements for collateral warranties from the Sub-Contractor.
24 As a preliminary step, the Contractor may use the ICSub and ICSub/D User Checklist (Appendix D to this Guide) to
collate the basic information for completion of the Agreement and its Sub-Contract Particulars. In terms of Listed
Documents and the more general information required, it is important, in the interests of time and dispute
avoidance, that only relevant material should as far as practicable be used and that information supplied is kept
properly updated.
25 Each of the Sub-Contract Agreements incorporates (by reference) their respective Conditions. There are no entries
to be made in the Conditions, so it is not strictly necessary to include them in the documents exchanged on
signature. However, unless both Parties regularly use the relevant version of the Sub-Contract and have archive
copies, it is recommended that the Conditions are included as part of the executed Sub-Contract.

Agreement
General
26 In the case of ICSub and the Design version the terms of the Sub-Contract are established by the Agreement
(ICSub/A or ICSub/D/A), which the Parties execute either under hand or as a deed. The Agreement incorporates by
reference all the other Sub-Contract Documents including the Conditions (ICSub/C or ICSub/D/C). The Agreement
commences by identifying the Parties, the Sub-Contract Works and the Main Contract Works of which they form
part, followed by:
• the Recitals (First to Sixth in ICSub/A, First to Tenth in the Design Version);
• the Articles (1 to 6);
• the Sub-Contract Particulars (items 1 to 15);
• the Attestation forms; and
• the Schedule of Information.
27 Except where stated otherwise, the following comments on the Agreement should be taken to refer both to ICSub
and to the Design version, but only to those two versions.
28 In the case of Named Sub-Contracts the arrangement is different. The Invitation to Tender and the Tender
comprised in ICSub/NAM contain the Schedule of Information and the equivalent of the Sub-Contract Particulars,
and consequently the form of Sub-Contract Agreement is simpler. It has straightforward Recitals which require no
insertions or deletions and its Articles are very similar.
Recitals
29 The First Recital refers to the Main Contract, particulars of which are to be given in item 1 of the Schedule of
Information; it is important that the particulars are accurately completed and that the Sub-Contractor takes note of
the information given. Under clause 2·4·1 of the Conditions the Sub-Contractor is required to observe, perform and
comply with the applicable obligations of the Contractor under the Main Contract, as identified in or by the Schedule
of Information, and to indemnify the Contractor against the consequences of:
• breach, non-observance or non-performance of the Main Contract provisions by the Sub-Contractor or his
employees or agents and
• acts or omissions which make the Contractor liable under the Main Contract.
30 This is an essential aspect of the Sub-Contract structure and is complemented by the Fourth Recital in ICSub/A
(the Eighth Recital in the Design version) which records that the Sub-Contractor has been given a copy of, or a
reasonable opportunity to inspect, other relevant Main Contract-related documents and information listed in item
1·9 of the Schedule of Information.
31 These should as far as possible be limited to documents or extracts relevant to the particular Sub-Contract; they
should be correctly listed and the Sub-Contractor must be given a copy or reasonable opportunity to inspect.
32 The Second Recital describes the Sub-Contractor’s work by reference to the Numbered Documents, which are to
be listed in item 15 in the Sub-Contract Particulars.
33 The Third Recital in ICSub/A (in the Design version, the Seventh) relates to the priced Activity Schedule, if one is to
be provided. Where the Adjustment Basis and Article 3A apply, this is useful for calculating interim payments (see
clause 4·10·1·1); it has no role where the Remeasurement Basis and Article 3B apply. A specimen is set out in
Appendix B to this Guide.
34 In the Design version, the Third to Sixth Recitals relate to the Sub-Contractor’s Designed Portion. A brief
description should be given in the Third Recital and full details of the Contractor’s Requirements should be included
in the Numbered Documents (item 15 of the Sub-Contract Particulars), as should the Sub-Contractor’s Proposals
and SCDP Analysis. The documents should be annexed to the Agreement and be signed or initialled by or on
behalf of each Party. The Sixth Recital is intended as a check that there is no apparent inconsistency between

Contractor’s Requirements and Sub-Contractor’s Proposals. If there is any apparent discrepancy or divergence, it
should be resolved before the Sub-Contract is executed; as indicated by the footnote, where the Contractor
accepts the Sub-Contractor’s Proposals, this should be reflected in the Contractor’s Requirements.
35 The Fifth and Sixth Recitals in ICSub/A (in the Design version, the Ninth and Tenth) relate to Framework
Agreements and the Supplemental Sub-Contract Provisions. Comments on the Supplemental Provisions are set
out below in relation to Schedule 3.
Articles
Article 1
36 This defines the Sub-Contract (and hence the ‘Sub-Contract Documents’) as comprising the Agreement, together
with:
• the documents referred to in and annexed to the Schedule of Information;
• the Sub-Contract Conditions; and
• the Numbered Documents.
Article 2
37 This sets out the Sub-Contractor’s basic obligation, i.e. to carry out and complete the Sub-Contract Works in
accordance with the Sub-Contract including, in the Design version, the requirement to complete the design for the
Sub-Contractor’s Designed Portion. The underlying obligations are then more fully described in clauses 2·1 to 2·4
of the Conditions.
Article 3
38 This contains alternative provisions, Articles 3A and 3B:
• Article 3A, which more commonly applies, provides for a fixed lump sum price (‘the Sub-Contract Sum’) which
is subject to adjustment only for Variations, provisional sums etc. (the Adjustment Basis) (see clauses 4·1 and
4·3);
• Article 3B is for use where the Sub-Contract Works are to be completely re-measured and valued (the
Remeasurement Basis) and requires the insertion of the Sub-Contract Tender Sum (see clauses 4·2 and 4·4).
In each case the sum excludes VAT (see clause 4·7). As finally adjusted or measured, it becomes the ‘Final Sub-
Contract Sum’.
Articles 4 to 6
39 In line with the Construction Act, the Sub-Contract provides a contractual right for either Party to refer a dispute or
difference for adjudication. The adjudicator’s decision will be binding until the dispute is finally determined by legal
proceedings, by arbitration (if the Sub-Contract provides for arbitration or the Parties otherwise agree to arbitration)
or by negotiation.
40 If either Party is not prepared to accept the Adjudicator's decision as final, subsequent legal proceedings or
arbitration will involve consideration of the dispute or difference as if no decision had been made by the
Adjudicator, not by way of appeal from the decision.
41 Arbitration will apply to disputes or differences between the Parties only if it is stated in item 2 of the Sub-Contract
Particulars that Article 5 and clauses 8·3 to 8·8 apply or if the Parties subsequently agree to arbitration. It should be
noted that there are three specified exceptions to the Article 5 agreement to arbitrate.
Sub-Contract Particulars
42 Proper completion of the particulars is important and may be facilitated by using Appendix D but, wherever
practicable, they contain a default provision. Where there is a default provision, an entry need be made only where
it is intended that the default position is not to apply.
43 Where the printed form of Agreement is used, rather than the JCT Digital Service version, there may on occasion
be insufficient space for complete entries. Where that is the case, the easier solution may be to refer to a separate
document which is then included in the Numbered Documents. Alternatively, use may be made of the traditional

continuation sheets. Any continuation sheets should be identified as such and then, when signed or initialled by or
on behalf of each Party, annexed to the Agreement.
Conditions (Item 1)
44 The entries here are intended to identify:
• any JCT Amendments that apply to the Conditions;
• (by deletion of the relevant line) cases where there is no Schedule of Modifications;
• cases where the Conditions are supplemented by a Framework Agreement (or Agreements) and cases where
all or some of the Supplemental Sub-Contract Provisions are disapplied. (The entries here should be
consistent with those for the Main Contract. See also the comments below on Schedule 3.)
Arbitration (Item 2)
45 The Contractor may wish to select the same method of final dispute resolution as applies under the Main Contract,
but there is no requirement to do so. If disputes are to be referred to Arbitration the words “do not apply” should be
deleted.
Sub-Contract Base Date (Item 3)
46 The Sub-Contract Base Date is relevant (inter alia) to clause 2·10·2·1 in the Design version (Divergences from
Statutory Requirements) and, in both versions, to the Fluctuations Option (Schedule 2); it also helps to determine
the edition/issue and/or version of documents relevant to the Sub-Contract, e.g. the Standard Method of
Measurement and definitions of the prime cost of daywork (clause 5·6). The Main Contract Base Date is stated in
the Main Contract Particulars. For Sub-Contract Works early in the programme the two dates may be the same but,
for sub-contracts entered into later, the Sub-Contract Base Date should generally be a date at which relevant sub-
contractors can reasonably be expected to base their tenders.
Address for notices (Item 4)
47 Each Party may if it wishes specify an address for notices other than its registered office, principal place of
business or other address given on the first page of the Agreement. (Under clause 1·7, there is provision for the
address to be altered by notice to the other Party and a default provision if it ceases to be current.)
Programme (Item 5)
48 Clause 2·2 of the ICSub/C Conditions requires the Sub-Contract Works to be carried out and completed in
accordance with the programme details stated in the Sub-Contract Particulars (item 5) and reasonably in
accordance with the progress of the Main Contract Works or each relevant Section of them, subject to the Sub-
Contractor receiving notice to commence work in accordance with those particulars and subject to clause 2·12
(adjustment of period for completion). The aggregate period of notice in item 5·3 in ICSub/A should in all cases take
account of materials procurement, fabrication, delivery to site and the CDM Planning Period.
49 In the Design version, the aggregate period shown after item 5·3 also needs to take into account the time required
both for the design of the Sub-Contractor’s Designed Portion and to comply with the Main Contract Design
Submission Procedure (see clause 2·6·3 of the Design version Conditions). Clause 2·6·3 requires that the Sub-
Contractor’s Design Documents and other information referred to in clause 2·5·3·1 be provided to the Contractor as
and when necessary to enable him to comply with that and any other applicable procedures. It also provides that
the Sub-Contractor is not to commence any work to which such a document relates before the procedure has been
complied with. Sub-Contractors with design responsibilities should ensure that sufficient time has been allowed for
compliance. (A copy of that procedure, assuming that there is one, should be made available to sub-contract
tenderers for packages involving a Sub-Contractor’s Designed Portion and then included either with the Schedule
of Information or as a Numbered Document.)
50 Good practice requires regular updating of Sub-Contractors on the progress of the Main Contract Works,
particularly prior to commencement of their work on site, not mere reliance on giving the minimum period of notice.
Attendance (Item 6)
51 This item contains a list of possible attendance items, which should be tailored to the particular project and sub-
contract works package(s) in question, with details of any additional attendance items which the Contractor is to
provide free of charge to the Sub-Contractor. Attendance items other than those listed are to be provided by the
Sub-Contractor.

52 The Main Contract Particulars should indicate (against the reference to clause 6·13) whether or not the Joint Fire
Code applies and, if it does, whether or not the additional requirements in respect of a ‘Large Project’ apply. The
additional requirements are set out in paragraphs 6·3 and 12·8 of the code.
53 If the Joint Fire Code applies and temporary buildings are to be located either within the building under construction
or within six metres of it, they have to be of special construction (see paragraphs 12·4 and 12·8 of the code).
54 Unless all rubbish resulting from the carrying out of the Sub-Contract Works is to be disposed of off-site, the
manner of disposal should be stated.
Interim payments – due dates (Item 7)
55 The 2011 editions include new entries in relation to clause 4·9. The first is for specifying the first due date, where
this can be fixed and, e.g., where it is necessary to meet pre-fabrication costs, etc. Under clause 4·9·1 the default
date is one month after commencement of work on site. If in the second entry it is stated that clause 4·9·2 applies,
the Sub-Contractor is required to make an application for each interim payment and the due date in each case will
be the later of the monthly date that would apply under clause 4·9·1 and the date of receipt of the Sub-Contractor’s
application.
56 This item in the 2011 edition also includes four additional entries to reflect the agreed approach to the retained
percentage and its final release, as referred to in the Introduction to this Guide.
57 The entry for Minimum Retained Amount is aimed at avoiding prolonged retention of relatively small sums that
cannot serve any practical purpose in terms of an incentive to carry out rectification work.
58 The Final Release Date entry is central to the agreed approach. Users will note the method of calculating the
default date; this is based on the Date for Completion, i.e. a date fixed at the outset under the Main Contract. This
must be distinguished from the Main Contract Completion Date, which starts as the Date for Completion but is
adjusted for any extensions of time subsequently given. In calculating a specific date, as will be seen from the
default provision, appropriate allowance should be made not only for the rectification period but also for the
perceived average programme extension in similar cases, covering variations and the like, and also the further time
needed after the rectification period for completion of rectification work and obtaining the certificate of making good.
59 Where it is agreed that the default formula should apply, it is desirable that the Date for Completion and applicable
Rectification Period be inserted.
60 There may also be cases where as an alternative to a fixed date, and to the default date, it is appropriate to fix a
specific period from practical completion of the Sub-Contract Works. In such a case the fixed date entry can of
course be adapted accordingly.
Interim payments – percentage of value (Item 8)
61 There are two entries indicating the percentage of the value of the work to be paid in interim payments. An insertion
need be made only if the percentage retained up to practical completion is, subject to clause 4·9·4, to be other than
5% or other than 2½% thereafter; the percentage in each case need not be the same as that in the Main Contract.
Listed Items (Item 9)
62 Where the Contractor and Sub-Contractor agree that payment is to be made for any goods and materials before
delivery to the site, those goods and materials should be listed. If a bond is required in respect of them, the Surety’s
maximum liability should be stated.
Fluctuations Option (Item 10)
63 Where the Fluctuations Option applies under the Main Contract (see the Main Contract Particulars), the Main
Contract requires that the same Option should apply to any sub-contract other than one with a Named Sub-
Contractor. In the case of the latter, the Employer may elect that the Formula Adjustment Option should apply.
Dayworks (Item 11)
64 Entries are required only where no Schedule of Daywork Rates or prices is included in the Numbered Documents.
If no such Schedule is included, the percentage additions to each section of the prime cost should be stated, with
the exception of those relating to labour in cases where an All-Inclusive Rate for labour is to apply.
Insurance – personal injury and property damage (Item 12)
65 The cover to be stated is the minimum level to be provided by the Sub-Contractor in respect of death or personal
injury (other than to employees covered under the Sub-Contractor’s statutory employer’s liability policy) and in
respect of damage to property (excluding Specified Perils damage to the Main Contract Works and Site Materials).

66 The required level of cover should not normally exceed that stated in the Main Contract Particulars but it may be
less (e.g. where the Sub-Contractor is unable to provide that level of cover) so long as the Contractor’s insurance
covers the difference. Special arrangements very often need to be effected in the case of work in buildings that are
in multiple occupation (office and flat blocks etc).
Sub-Contractor’s Designed Portion (SCDP) Professional Indemnity insurance (Item 12 in the Design version)
67 Item 12 in the Design version contains this additional entry. The level of cover entry must be completed if PI
insurance is required under clause 6·14 of the Design version Conditions. If the overall amount of cover is not
inserted, clause 6·14 will not apply, regardless of any other entry. Similarly an entry is needed for pollution and
contamination claims cover.
Incorporation of the Sub-Contract Works into the Main Contract Works (Item 13)
68 For the purposes of clause 6·7·2 of the Conditions, clause 6·7·8 provides that the Sub-Contract Works are deemed
fully, finally and properly incorporated into the Main Contract Works when completed to the extent indicated in item
13. By way of exception to the general, continuing liability of the Sub-Contractor for loss or damage under clause
6·7·1, clause 6·7·2 is intended to exclude liability of the Sub-Contractor for loss or damage for which he is not
responsible that occurs after such incorporation of his work. Appropriate entries here should help to avoid or reduce
the scope for dispute as to when incorporation has taken place.
Settlement of Disputes (Item 14)
69 Adjudication is always available to either Party.
70 An Adjudicator may be named in the Sub-Contract Particulars but should not generally be named without his prior
agreement and the same person should not normally be named in both a Sub-Contract and the Main Contract.
Even where an adjudicator is named, the Parties may wish jointly to select a nominating body in case he is
unwilling or unable to act.
71 For Arbitration, where relevant, the choice is limited to identifying the body that will appoint an arbitrator if the
Parties fail to agree on one after notice of arbitration is served (see the comments below in relation to section 8). In
default of another selection, the relevant body is the RICS.
Numbered Documents (Item 15)
72 Where a document other than those specifically referred to in Article 1 is intended to be a Sub-Contract Document,
it should be included in the list of Numbered Documents and a copy should be annexed to the Sub-Contract. For
guidance as to documents to be included in the list, see the footnote to this item in the Agreement.
Attestation
Execution under hand or as a deed
73 In all three versions of the Sub-Contract Agreement, the attestation provisions remain in standard JCT layout with
separate forms for execution under hand and execution as a deed. Different attestation provisions are required
under the law of Scotland (for which the Scottish Building Contract Committee Limited issues Scottish contract
forms); other attestation clauses may also be needed in the case of certain housing associations, partnerships and
possibly, as discussed below, foreign companies.
74 The primary factor governing the decision as to whether to execute the contract under hand or as a deed is
whether the limitation period for instituting proceedings in contract is to be 6 years, as in the case of execution
under hand, or 12 years, where the contract is executed as a deed.
75 If the Main Contract is executed as a deed and the Contractor wishes to have a similar limitation period for
recourse against a sub-contractor to that which the Employer has against the Contractor, the Sub-Contract should
be executed as a deed. (Clause 2·18 of the Sub-Contract Conditions in any event requires that where the Main
Contract is executed as a deed, any collateral warranties required from the Sub-Contractor are to be executed as
deeds.)
Foreign companies
76 Many foreign companies involved in development and construction now themselves carry on business in the UK,
rather than operating here through UK subsidiaries.

77 Under existing Companies legislation, a foreign company can execute deeds either:
• by affixing its common seal or any manner of execution permitted under the laws of its place of incorporation;
or
• by expressing the document to be executed by the company under the signature of persons authorised to sign
on its behalf in accordance with its domestic law.
78 Many foreign companies do not have a seal and the authority of relevant signatories needs to be checked. If there
is any doubt, professional advice should be obtained.
79 To avoid complications as respects the service of claims or notices outside the jurisdiction, consideration should
also be given to inserting an obligation on the foreign company for the duration of the Sub-Contract to maintain an
agent for service within England and Wales or within Scotland or Northern Ireland, where appropriate.
Schedule of Information
80 This Schedule should be completed by the Contractor, with appropriate copy documents annexed.
The Main Contract (Item 1)
81 The schedule of modifications referred to in item 1·5 relates to Main Contract amendments. If there is such a
schedule, it should be annexed to the Schedule of Information. (This schedule should be distinguished from the
Schedule of Modifications to the Sub-Contract, which is referred to in Article 1 and is required to be listed and
annexed as a Numbered Document.)
82 The copy of the Main Contract Particulars (item 1·6) should be a copy of the version included in the Main Contract.
83 If any other documents and information are listed in item 1·9, the Sub-Contractor should ensure that in each case
he has a copy or has had a reasonable opportunity to inspect them, as stated in the Recitals.
Construction Phase Plan (Item 2)
84 Under the definition of the plan in clause 1·1, the requirement to annex a copy to the Schedule of Information is
limited to those parts of it that are applicable to the Sub-Contract Works.
Programme Information (Item 3)
85 The Programme Information provided by the Contractor should be taken into account when completing item 5
(Programme) of the Sub-Contract Particulars.

Conditions
General
86 The format and arrangement into sections of the three versions of the Sub-Contract Conditions (ICSub/C,
ICSub/D/C and ICSub/NAM/C) is substantially the same. The clause numbers given below are those in ICSub/C or
ICSub/D/C, the Design version. The latter differ from the former only in terms of the few additional design-related
provisions at the end of sections 2, 5 and 6; the Named Sub-Contract Conditions also generally follow the same
order as ICSub/C, with the equivalent of some but not all the additional design-related provisions inserted in section
2 (from and after clause 2·18) and in section 6.
87 In terms of the Conditions the only material differentiation between a Named Sub-Contractor and a domestic sub-
contractor consists in the additional fluctuations option (Formula Adjustment) that may be available to the Named
Sub-Contractor under clause 4·15 of the Named Sub-Contract Conditions and in the Specified Perils cover in
respect of existing structures and their contents that is extended to him under clause 6·6·1 of those conditions.
Section 1 – Definitions and Interpretation

Definitions (clause 1·1)
88 Six additional defined terms have been included in the three versions to reflect the changes in section 4, namely
Minimum Retained Amount, Payment Application, Payment Notice and Default Payment Notice, Pay Less Notice
and Final Release Date. All are straightforward and have been included in order to simplify provisions which the
amendments to the Construction Act have inevitably made more complex.
Effect of Final Payment Notice (clause 1·8)
89 The giving of the Final Payment Notice in accordance with clause 4·14·2 activates the provisions of clause 1·8,
under which it becomes conclusive evidence of the matters set out in clause 1·8·1 and hence brings a degree of
finality to several important aspects of the Sub-Contract. That is subject to the outcome of any proceedings
commenced before the Final Payment Notice is given or within the other time limits referred to in clauses 1·8·2 and
1·8·3.
90 In the 2011 edition of the three versions, clause 1·8 has been amended by expanding 1·8·2. In view of the
decoupling of the last interim payment and final payment under the sub-contract from the Main Contract timetable,
a degree of protection is now given to Contractors in relation to later claims by the Employer. By the inclusion of the
new clause 1·8·4, the Sub-Contractor conversely is protected against the effect of a Contractor’s failure to issue the
Final Payment Notice within the new, strict time limit.
91 If the Sub-Contractor disagrees with the Final Payment Notice and the amount of the Final Payment on matters that
are not already the subject of proceedings, he is still obliged (under clause 1·8·2) to commence adjudication,
arbitration or other proceedings within 10 days of receipt of the notice if he wishes to avoid that notice becoming
final in respect of any clause 1·8·1 matters. Save in respect of later claims by the Employer under the Main
Contract involving matters related to the Sub-Contract or Sub-Contract Works, the Contractor must also still do the
same. (Clause 1·8·2·2 reflects the potential for later claims by the Employer and clause 1·8·2·3 is intended to deal
with the point that if in a later claim the Employer proceeds against the Contractor by means of a reference to
adjudication, the Contractor would not normally be able to join the Sub-Contractor in the adjudication.)
92 Where an Adjudicator gives his decision on a dispute or difference after the date of the Final Payment Notice and
either Party then wishes to have the dispute or difference determined by arbitration or legal proceedings, those
proceedings must under clause 1·8·3 be commenced within 28 days of the date on which the Adjudicator gives his
decision if the decision is not to have final effect under clause 1·8·1.
93 (It may perhaps be noted that, in the case of Employer claims referred to in clause 1·8·2·2, it was considered that
notice to the Sub-Contractor of potential joinder was adequate. The JCT intends shortly to undertake a full review
of these provisions across its range.)

Section 2 – Carrying out the Sub-Contract Works
Sub-Contractor’s general obligations (clauses 2·1 to 2·3)
94 Clause 2·1 and the clauses that follow it set out in greater detail the Sub-Contractor’s obligation under Article 2 to
carry out and complete the Sub-Contract Works. Under clause 2·1, the work is to be carried out in a proper and
workmanlike manner, in accordance with the Construction Phase Plan and other Statutory Requirements and in
conformity with the Contractor’s reasonable directions and requirements regulating the carrying out of the Main
Contract Works. In relation to the Sub-Contract Works the Sub-Contractor is also required to give all notices
required by the Statutory Requirements.
95 In the Design and Named Sub-Contractor versions, clause 2·1 also sets out the basic obligations in respect of the
Sub-Contractor’s Designed Portion or NAM Designed Works. These mirror those in clause 2·2 of the ICD Main
Contract Conditions, with requirements to:
• complete the design for such work;
• select specifications for the kinds and standards of materials, goods and workmanship to be used, so far as
not already specified;
• comply with the Contractor’s directions, or (in the case of a Named Sub-Contractor) the Architect/Contract
Administrator’s instructions for integration of the design; and
• comply with relevant CDM Regulations.
96 In terms of time, clause 2·2 requires the Sub-Contract Works to be carried out and completed in accordance with
the programme details in the Sub-Contract Particulars (item 5) and reasonably in accordance with the progress of
the Main Contract Works.
97 Clause 2·3 makes further provision with respect to materials, goods and workmanship and CSCS certification.
Where the quality of materials or goods or standards of workmanship are not specified, but are reserved for
Architect/Contract Administrator’s approval, they are to be to his reasonable satisfaction. Since the Sub-Contractor
has no direct right of communication with the Architect/Contract Administrator, he should in such cases ensure that
the Contractor obtains that approval at an early stage.
Compliance with the Main Contract and indemnity (clause 2·4)
98 Under clause 2·4·1 the Sub-Contractor is required to observe, perform and comply with the Contractor’s obligations
under the Main Contract (as identified in the Schedule of Information to the Sub-Contract Agreement) and to
indemnify him in respect of any liability arising from the Sub-Contractor’s (or his employees’ or agents’) failure to do
so. Clause 2·4·2 contains a further indemnity to the Contractor in respect of negligence or breach of duty by the
Sub-Contractor, his employees or agents.
99 These are general indemnities to the Contractor under which the Sub-Contractor’s liability may include the
Contractor’s costs, liquidated damages due to the Employer and payments to third parties to whom the Contractor
is liable, whether in the form of others on site or members of the public. Being indemnities, these provisions may
increase the liability of the Sub-Contractor to the Contractor for costs, losses and expenses beyond the amount
which might otherwise be recoverable for breach of the Sub-Contract. Liability is unlimited; the Parties may
expressly agree that it should be limited by way of an overall cap but there is no provision for such a cap in the
Agreement or Conditions.
100 (The indemnities also have the potential effect of extending the Sub-Contractor’s period of liability since the cause
of action (that sets the liability period running) does not generally arise under an indemnity until the loss is actually
suffered).
Supply of Documents, Setting Out etc. (clauses 2·5 and 2·6)
101 The Numbered Documents are intended fully to show and describe the Sub-Contract Works (excluding details of
the Sub-Contractor’s own design work), but in practice there will almost always be a need for further drawings or
details and for the Contractor to give directions (clause 2·7·1). There may also be a need for the Sub-Contractor to
provide the Contractor with working/setting out drawings and other information (clause 2·7·2).
102 The further drawings, information and directions are to be provided at a time which has regard to the progress of
the Sub-Contract and the Main Contract Works; there is an obligation on each Party to advise the other in good
time if he believes the other Party is unaware of the time by which those items will be required. As indicated by the
clause 2·5·1 reference to Main Contract Conditions, compliance by the Contractor may in turn depend on his
receiving drawings, information or instructions from the Architect/Contract Administrator.

103 Clause 2·5·3, which appears only in the Design and Named Sub-Contractor versions, provides for the supply of the
Sub-Contractor’s design documents, levels and setting-out dimensions, and (if requested) further details of the
design work. Those design documents may and, in many cases, will need to be passed through the Main Contract
design submission procedure (see also the comments above on item 5 of the Sub-Contract Particulars): it is
important that the Sub-Contractor should not commence the work to which a design document relates before the
procedure has been complied with.
Errors, Discrepancies and Divergences (clauses 2·7 to 2·10)
104 The sub-section deals in detail with the requirements for notification of errors, discrepancies and divergences
discovered in Sub-Contract Documents and in directions, either in or between themselves or in relation to the
Statutory Requirements. It also deals with the cost of the remedial action. There is a requirement for immediate
notification by the Sub-Contractor (clause 2·8·3) and the Contractor is required to give directions.
105 Subject to two exceptions in the Design version, the general principle on cost under ICSub and ICSub/D is simple:
provided there is immediate notification by the Sub-Contractor, it is borne by the Party responsible for the
document in question. If there are Bills of Quantities (i.e. bills supplied by the Contractor) and they contain
undisclosed departures from SMM 7 or, under the Design version, if there are inadequacies in the Contractor’s
Requirements, the Contractor is responsible for the cost of the necessary Variation; the Sub-Contractor, under the
Design version, is responsible for errors, discrepancies and divergences in the Sub-Contractor’s Proposals, his
SCDP Analysis and in any other design work he carries out. The same principle is intended to apply in respect of
Named Sub-Contracts where the Named Sub-Contractor carries out design work, though in that case it is for the
Architect/Contract Administrator to give instructions under clause 2·1·2.
106 The two Design version exceptions arise in relation to divergences from the Statutory Requirements. Under clause
2·10·1 the Sub-Contractor is responsible for checking that the Contractor’s Requirements and any instructions in
relation to the Sub-Contractor’s Designed Portion conform to the Statutory Requirements in the same way as his
own design documents. However, if the divergence arises from a change in Statutory Requirements after the Sub-
Contract Base Date which necessitates an alteration to the Sub-Contractor’s Designed Portion, the risk and cost of
any divergences between the Statutory Requirements and any SCDP Documents, whether they are Contractor’s or
Sub-Contractor’s documents, falls on the Contractor (and ultimately, under the Main Contract, on the Employer).
107 In the case of Named Sub-Contractors the second exception does not apply; if there is a perceived risk of a change
in Building Regulations or other Statutory Requirements, recoverability of the cost to the Named Sub-Contractor
would have to be negotiated beforehand with the Employer.
Unfixed Materials and Goods (clause 2·11)
108 When goods and materials have been delivered to site, their removal from site requires the consent of both the
Contractor and the Architect/Contract Administrator. Clause 2·15·2 provides that, as soon as the Employer has paid
the Contractor under an Interim Certificate that includes those goods or materials, they become the Employer’s
property, whether or not the Sub-Contractor has then been paid for them.
Adjustment of Period for Completion (clauses 2·12 and 2·13)
109 If it becomes reasonably apparent that the commencement, progress or completion of the Sub-Contract Works is
being or is likely to be delayed, the Sub-Contractor is required under clause 2·12 to give the Contractor a written
notice, together with any relevant information. Notice should be given irrespective of the cause; the obligation is not
limited to events entitling the Sub-Contractor to an extension of time.
110 On receipt of the notice, the Contractor is required to respond as soon as he can estimate the length of the delay,
and, where appropriate, to adjust the period or periods for completion of the Sub-Contract Works.
111 The events for which such adjustment is required to be made (‘Relevant Sub-Contract Events’) are listed in clause
2·13. They generally mirror the Relevant Events in clause 2·20 of the Main Contract, extended to cover inaccurate
forecasts of Approximate Quantities made in Bills of Quantities and opening up/testing directed by the Contractor of
his own accord. They also include, at clause 2·13·5, suspension by the Sub-Contractor under clause 4·13 and, at
clause 2·13·7, any impediment, prevention or default, on the part of the Contractor or any Contractor’s Person
(unless caused or contributed to by the Sub-Contractor or anyone for whom he is responsible).
112 However, under each version of the Sub-Contract, in the same way as under both versions of the Main Contract,
the position remains that where events occur before practical completion of the Sub-Contractor’s work or such work
in a Section but after the expiry of the period for completion of that work, extensions of time may be given only in
respect of certain Relevant Events, in this case those within clauses 2·13·1 to 2·13·8, i.e. events for which the
Contractor and/or the Employer is responsible.

113 The giving of any extension of the period or periods for completion is conditioned by clause 2·12·4 which requires
the Sub-Contractor constantly to use his best endeavours to prevent delay in the progress of the Sub-Contract
Works, however caused, and, in the event of delay, to do everything that the Contractor may reasonably require
him to do to proceed with the Sub-Contract Works.
Practical Completion and Lateness (clauses 2·14 and 2·15)
114 Unless the Contractor notifies his dissent, the date of practical completion of the Sub-Contract Works or of such
works in a Section is established simply by notice from the Sub-Contractor. If the Contractor disagrees with the
notice, he is obliged to confirm practical completion as soon as he is satisfied; there is an end-stop date of practical
completion of the Works or relevant Section.
115 Where the Main Contract Works are, or form part of, a notifiable project for the purposes of CDM Regulations, and
as a precondition to any Sub-Contract work being considered as practically complete, the Sub-Contractor must
provide the information in respect of the Sub-Contract Works that is required for the health and safety file. In the
Design and Named Sub-Contractor versions, there is a similar precondition with respect to as-built drawings,
whether or not the project is notifiable.
116 If the Sub-Contractor fails to complete the Sub-Contract Works or part of them within the relevant period or periods
and the Contractor gives him the requisite notice, the Sub-Contractor is required to pay the Contractor his loss and
expense arising from the failure. This, in addition to including other sub-contractors’ loss and expense, may where
relevant include liquidated damages payable under the Main Contract.
Defects (clauses 2·16 and 2·17)
117 Clause 2·16 sets out the Sub-Contractor’s obligations to make good any defects in his work due to any materials,
goods or workmanship that are not in accordance with the Sub-Contract; clause 2·17 gives the Contractor power to
pass down any deduction under the Main Contract attributable to any defects in the Sub-Contractor’s work that the
Architect/Contract Administrator allows to remain. As to opening up and remedial measures, see the comments
below on clauses 3·9 to 3·13.
Collateral Warranties (clause 2·18)
118 The detailed requirements for collateral warranties that this clause requires the Sub-Contractor to grant are
intended to be set out in Part 2 of the copy of the Main Contract Particulars annexed to the Schedule of
Information, but may if necessary be set out in a Numbered Document listed in the Sub-Contract Particulars.
119 The obligations of the Sub-Contractor in respect of any such warranties are set out in clause 2·18 of ICSub and the
Design version. If the warranty is other than a JCT form (Sub-Contractor Collateral Warranty for a Funder
(SCWa/F), for a Purchaser or Tenant (SCWa/P&T) or for the Employer (SCWa/E) (published separately)), copies of
the required forms of warranty should be annexed to the Schedule of Information. Where the Employer sets out
specific requirements in the Main Contract, any points that the Sub-Contractor wishes to raise should be raised
before the Sub-Contract is entered into. The Contractor is obliged under the Main Contract to secure execution of
the Sub-Contractor’s warranties and it is therefore desirable that the Sub-Contractor should be asked to execute
and deliver the required warranties to the Contractor at the time the Sub-Contract is entered into.
120 The clause does not appear in the Named Sub-Contractor version: collateral warranties in that case are to be dealt
with under the Named Sub-Contractor/Employer Agreement (ICSub/NAM/E).
Sub-Contractor’s Design (clauses 2·19 to 2·21 – Design version)
121 The sub-section deals first at clause 2·19 with the supply of as-built drawings; as noted in the context of clause
2·14, this, where applicable, is a precondition of practical completion of the Sub-Contract Works or of such works in
a Section. Clause 2·20 sets out the terms and conditions relating to the licence to the Contractor to use the Sub-
Contractor’s Design Documents. The licence is in substantially the same terms as the licence to be granted to any
Purchasers, Tenants, Funder or the Employer under the relevant JCT collateral warranties and is conditional upon
the Sub-Contractor having been paid in full.
122 Clause 2·21 deals with the Sub-Contractor’s liability in respect of his design work. Under JCT contracts, the
required standard is intended to be the same as that of any independent architect or other professional designer
with appropriate experience. Where the Contractor has limited his liability for consequential losses under clause
2·34·3 of the Main Contract Conditions, it is intended that the Sub-Contractor’s liability should be similarly capped.
123 In line with the comments on clauses 2·7 to 2·10 above and also mirroring provisions in the Main Contract, clauses
2·21·5 and 2·21·6 are intended to make it clear that, subject to checking conformity with the Statutory
Requirements as they affect the Sub-Contractor’s Designed Portion, the Sub-Contractor is not responsible for the
Contractor’s Requirements.

124 The Named Sub-Contractor version at clauses 2·18 and 2·19 contains similar provision with respect to as-built
drawings and the Contractor’s licence to use design work. Liability for his design work is, however, primarily a
matter between him and the Employer under the Named Sub-Contractor/Employer Agreement (ICSub/NAM/E).
Section 3 – Control of the Sub-Contract Works

Assignment and Sub-contracting (clauses 3·1 to 3·3)
125 The Sub-Contractor may not without the written consent of the Contractor assign the Sub-Contract or sub-
subcontract either the whole or part of the Sub-Contract Works or, where applicable, the design of the Sub-
Contractor’s Designed Portion (or NAM Designed Work), but consent is not to be unreasonably delayed or
withheld. The Sub-Contractor remains wholly responsible for carrying out and completing the Sub-Contract Works
and for his design work, notwithstanding such consent.
126 With regard to clause 3·3 (Conditions of sub-contracting), JCT publishes a short form of Sub-subcontract (SubSub)
which is suitable but not mandatory for use with the Intermediate Sub-Contracts. This is a short form document
which requires that an unpriced copy of the Sub-Contract be available to the sub-subcontractor, who is deemed to
have knowledge of its terms as they apply to his work.
Contractor’s directions (clauses 3·4 to 3·8)
127 The Contractor is empowered to give directions to the Sub-Contractor in respect of the Sub-Contract Works.
However:
• they must be reasonable and given in writing;
• any instruction given by the Architect/Contract Administrator under the Main Contract which affects the Sub-
Contract Works and which the Contractor issues to the Sub-Contractor is to be treated as a direction;
• subject to two specified exceptions, the Sub-Contractor must comply with the Contractor’s directions forthwith;
and
• failing compliance after a 7 day warning notice, the Contractor may use others to carry out the direction and
the Sub-Contractor will be liable for the additional costs incurred as a consequence.
128 The exceptions to the requirement for immediate compliance with directions are:
• a direction for a Variation under clause 5·1·2, i.e. one affecting access, working space, working hours or order
of working, to which the Sub-Contractor makes reasonable written objection; and
• (in the Design and Named Sub-Contractor versions) directions with respect to the Sub-Contractor’s Designed
Portion or NAM Designed Works where the Sub-Contractor considers that compliance would injuriously affect
the efficacy of his design and he notifies his objection to the Contractor. (The Contractor can overrule the
objection by confirming the direction.)
129 By clauses 3·7 and 3·8, it is a requirement that throughout the execution of the Sub-Contract Works the Sub-
Contractor shall have a competent person-in-charge on site. He is treated as the Sub-Contractor’s agent for the
purpose of receiving directions, and that the Sub-Contractor ensures access at all reasonable times to work in
progress on other premises that is destined for the Sub-Contract Works.
Opening Up and Remedial Measures (clauses 3·9 to 3·13)
130 Clauses 3·9 to 3·11 follow the similar provisions of clauses 3·14 to 3·16 in the Main Contract. The Contractor is
given a general right to issue directions requiring opening up for inspection or to arrange for or carry out any tests
of materials, goods or executed work (clause 3·9). As in the Main Contract, the cost involved is to be taken into
account in the computation of the Final Sub-Contract Sum unless:
• the requirement for such opening up or testing is included in the Sub-Contract; or
• the inspection or test shows that the materials, goods or work are not in accordance with the Sub-Contract.
131 Clause 3·10 deals with the procedure to be followed with respect to inspection or testing where work, materials or
goods are found to be defective; clause 3·11 sets out the Contractor’s powers to order removal and direct other
action.

132 Under clause 3·12 the Sub-Contractor may as a result of non-compliant work by others be required to take down
and re-execute his work so long as the direction is given prior to practical completion of his work; where he is
required to do so, he is to be paid for such work on the basis of a fair valuation.
133 Where the Contractor incurs costs (e.g. loss and expense claims by other sub-contractors) through non-compliant
work by the Sub-Contractor or the remedial action that it necessitates, clause 3·13 entitles him to an indemnity from
the Sub-Contractor.
Attendance (clause 3·14)
134 Clause 3·14·1 sets out the Contractor’s obligation to supply free of charge all the attendance items listed in item 6
of the Sub-Contract Particulars; any necessary items not listed there or in a Numbered Document are to be
provided by the Sub-Contractor himself.
135 Clause 3·14·2 gives express rights to use erected scaffolding, subject to an exclusion of liability, and clause 3·14·3
contains cross-undertakings with respect to use and non-interference; misuse of scaffolding or other property
provided by the Contractor is also covered by the indemnity under clause 2·5·2.
Health and Safety and CDM Requirements (clauses 3·17 and 3·18)
136 The Health and Safety provisions of clause 3·17 are supplemented by Supplemental Sub-Contract Provision 2
(Schedule 3) where it applies.
137 Under the 2007 CDM Regulations each Sub-Contractor on every project, like the Contractor/Principal Contractor,
has a wide variety of duties, starting with the requirements of competence (both of himself and those he engages)
and including the general duties of co-operation, co-ordination, prevention, provision of welfare facilities and
monitoring. There are also the same preconditions to commencing construction work (secure site, CDM Planning
Period and ensuring the training, site induction and supply of information to workers) (regulations 4 to 7 and 13).
138 Where the project is notifiable (i.e. likely to involve more than 30 days, or 500 person days, of construction work,
which is generally the case where IC or ICD 2011 is the Main Contract), there are additional preconditions to
construction work which Sub-Contractors should check (naming of CDM Co-ordinator and Principal Contractor,
supply to the Sub-Contractor of relevant parts of the Construction Phase Plan and notice of the project being given
to the Health and Safety Executive by the CDM Co-ordinator), various duties to supply information to the Principal
Contractor (risks, identity of (sub-)sub-contractors and injuries etc.) and other duties such as compliance with
directions from the Principal Contractor (regulation 19).
139 Where there is Sub-Contractor’s design, the Sub-Contractor also has the duties of a designer referred to in clause
2·1·3 of the Design and Named Sub-Contractor versions.
Suspension of Main Contract by Contractor (clauses 3·19 and 3·20)
140 The clauses set out the Contractor’s powers and the procedure if the Contractor gives the Employer notice of his
intention to suspend the performance of his obligations under the Main Contract. The Sub-Contractor should not
under this provision suspend work unless and until the Contractor directs him to do so. The Sub-Contractor’s
position is safeguarded against the consequences of such suspension, as to time by clause 2·13·6 and, as to loss
and expense, by clause 4·17·3.
Benefits under the Main Contract (clause 3·22)
141 The clause gives the Sub-Contractor a right (subject to an appropriate indemnity and security for costs) to require
the Contractor to take certain actions under the Main Contract. It may be relevant in the event of any contentious
decisions, opinions or instructions on the part of the Architect/Contract Administrator, e.g. in respect of time, as to
approval of the quality or standards of materials, goods and workmanship, in respect of opening up and remedial
measures, or as to the amount of any deductions attributable to Sub-Contract work.
Certificates under the Main Contract (clause 3·23)
142 The Contractor is obliged to notify Sub-Contractors of the date of certain certificates and events under the Main
Contract, namely:
• fixing or confirmation of the Completion Date for the Main Contract Works or Section – the Completion Date is
relevant to any liability of the Contractor for liquidated damages under the Main Contract, for which the Sub-
Contractor may in certain circumstances be liable to indemnify him;
• any notice or certificate under clause 2·25 or 2·27 of the Main Contract Conditions (Partial possession by the
Employer) – these are respectively deemed to be practical completion and completion of making good of that
part of the Main Contract Works;

• the Practical Completion Certificate and (where applicable) each Section Completion Certificate – the date
given is the latest deemed date of practical completion of the Sub-Contract Works, or the relevant part of them;
• certificate(s) of making good – these similarly give a latest deemed date of completion of rectification work
under the Sub-Contract (see clause 2·16·2);
• issue of the Final Certificate – this may be relevant for the purposes of clause 1·8.
Section 4 – Payment
General
143 In line with the Main Contract, the section deals first with the adjustments required to establish the overall price for
the Sub-Contract Works (the Final Sub-Contract Sum), before going on to the provisions for interim payments and
the final payment and those relating to loss and expense. (The provisions relating to valuation and the Valuation
Rules themselves are in a separate section (section 5).)
144 Section 110 of the Construction Act provides, inter alia, that every construction contract shall provide an adequate
mechanism for determining what payments become due and when; the Sub-Contract is intended to reflect that
requirement.
145 Given the requirement and the 2009 amendments to the Construction Act in particular, amendments to the Sub-
Contract that may affect the integrity of the payment mechanism should not be made without professional advice. If
amendments are made and the mechanism ceases to be adequate, or otherwise non-compliant with the Act, Part II
of the Schedule to The Scheme for Construction Contracts (England and Wales) Regulations 1998 will to that
extent apply. Amendment in relation to the Sub-Contractor’s contractual right to suspend for non-payment may also
be ineffectual, given the underlying statutory right.
Sub-Contract Sum and Sub-Contract Tender Sum (clauses 4·1 to 4·6)
146 Where Article 3A applies, the Adjustment Basis and clauses 4·1, 4·3 and 5·2·1 apply for the purposes of calculating
the Final Sub-Contract Sum. For these purposes the Sub-Contract Sum is only to be adjusted in accordance with
the provisions of clause 4·3.
147 The alternative, Article 3B, provides for a Sub-Contract Tender Sum and for the Remeasurement Basis (i.e.
complete remeasurement of the Sub-Contract Works) to apply, with the Final Sub-Contract Sum being calculated in
accordance with clauses 4·2, 4·4 and 5·2·2.
148 Clause 4·6 sets periods for the delivery of documents and calculation of the Final Sub-Contract Sum; these are,
however, maximum periods and it is in the interests of both Parties that the relevant information and statement be
provided as early as possible.
VAT and CIS (clauses 4·7 and 4·8)
149 The Sub-Contract Sum or Sub-Contract Tender Sum is exclusive of VAT and, in making any payment, the
Contractor should pay any VAT properly chargeable. Payments to the Sub-Contractor are also subject to the
Construction Industry Scheme.
Interim payments (clauses 4·9 to 4·12)
150 The first interim payment is due on the date specified in the Sub-Contract Particulars or, in default of an entry there,
one month after commencement of the Sub-Contract Works on site. Subsequent interim payments continue to
become due on the same date in each successive month (or the nearest business day in that month) up to and
including the month following practical completion of the Main Contract Works. They thereafter become due on the
same monthly date at intervals of 2 months (unless otherwise agreed) up to the date for the last interim payment,
which is fixed by clause 4·9·2 and will include release of the percentage retained by the Contractor post-practical
completion of the Sub-Contract Works.
151 The final date for interim payments under the Sub-Contract is 21 days after the date on which they become due,
except where the date is postponed in the circumstances mentioned below.
152 Unless there has been agreement between the Parties for stage payments, payments to the Sub-Contractor are
the amounts calculated by the Contractor in accordance with clause 4·10.
153 The Contractor is required, not later than 5 days after the date on which an interim payment becomes due under
the Sub-Contract, to give a Payment Notice to the Sub-Contractor stating the sum that he considers due (clause
4·12·2). If the Contractor fails to give this notice, then, unless he gives a Pay Less Notice under clause 4·12·5, he is

required by clause 4·12·3 to pay the Sub-Contractor by the final date for payment the amount stated as due in the
Sub-Contractor’s Payment Application. In case of failure to give a Payment Notice, the Sub-Contractor may make a
Payment Application at any time after the 5 day period. In those circumstances the final date for payment is
postponed by the same number of days as the number of days after the 5 day period that the Sub-Contractor
makes that application (4·12·4).
154 It should be noted that for Sub-Contractor’s Payment Applications to have effect as ‘payee payment notices’ under
section 110B, they are required to state the sum that the Sub-Contractor considers due to him at the due date.
Previously his applications were required to state only the amount of the gross valuation; it now appears that (in
line with clause 4·10) he should also show as deductions those items specified in clause 4·10·3, giving as the net
total the amount he then considers due to him.
155 A Pay Less Notice under clause 4·12·5 may be given by the Contractor at any time not later than 5 days before the
final date for payment.
156 In summary, from the due date for an interim payment, the timetable for the Contractor is:
• within 5 days, to give a Payment Notice;
• within 16 days, to give any Pay Less Notice that may be required; and
• within 21 days (or such extended period as is mentioned above) to make the interim payment.
157 The amount of the Contractor’s payment should be the sum stated in his Payment Notice or, if he gives a Pay Less
Notice, the sum stated in the latter. If he fails to give a Payment Notice and does not give a Pay Less Notice, the
sum to be paid is that stated in the Sub-Contractor’s Payment Application. However, if the Contractor fails to give a
Payment Notice, he cannot give a Pay Less Notice until the Sub-Contractor has made that Payment Application.
158 If the Contractor fails to pay the sum specified in the previous paragraph, the Sub-Contractor may give the
Contractor notice of his intention to suspend the performance of his obligations under the Sub-Contract (clause
4·13) and/or give warning notice of his intention to terminate his employment (clause 7·8); he is also entitled to
interest on any unpaid amount that should properly have been paid to him (clause 4·12·6).
Sub-Contractor’s right of suspension (clause 4·13)
159 Under clause 4·13 the Sub-Contractor may suspend any or all of his obligations under the Sub-Contract for non-
payment, but only if the default continues for 7 days after he has given a written notice of his intention to do so. If
the Sub-Contractor does suspend his obligations, he is entitled to an extension of the period for completion under
clause 2·13·5 and, under clause 4·13·2, any reasonable costs and expenses arising. (In view of the different
terminology now used in the Construction Act, the statutory right to costs and expenses is now shown separately in
that clause and no longer dealt with as loss and expense under clause 4·17.)
Final Payment (clause 4·14)
160 The Final Payment to the Sub-Contractor is the Final Sub-Contract Sum, calculated in accordance with clause 4·3
(on the Adjustment Basis) or clause 4·4 (where the Remeasurement Basis applies) less the total amount previously
due as interim payments. It becomes due 2 months after the due date for the last interim payment.
Fluctuations (clause 4·15)
161 ICSub and the Design version make provision for only a single Fluctuations Option (Contribution, levy and tax
fluctuations), which is set out in Schedule 2. The provision is optional and, if the relevant entry at item 10 of the
Sub-Contract Particulars is deleted, it will not apply.
162 If the Fluctuations Option applies:
• the percentage addition (paragraph 12 in Schedule 2) stated in item 10 of the Sub-Contract Particulars is
required by the Main Contract to be the same as that stated in the Main Contract Particulars against the entry
for clause 4·15 and Schedule 4.
• the net amount of any increase or decrease paid to or allowed by the Sub-Contractor under his Sub-Contract is
payable to or allowable by the Contractor under the Main Contract (see paragraph 3·2 of Schedule 4 to the
Main Contract Conditions).
163 In the case of Named Sub-Contractors, clause 4·16 of the Main Contract and the Named Sub-Contract Invitation to
Tender and Conditions (at clause 4·15) provide an additional Fluctuations Option (Option C – Formula adjustment),
reflecting the longer period potentially involved.

Loss and Expense (clauses 4·16 to 4·19)
164 By clause 4·16 the Sub-Contractor is expressly entitled to recover from the Contractor any agreed amount of direct
loss and/or expense which he incurs where the regular progress of the Sub-Contract Works is materially affected
by the occurrence of any of the Relevant Sub-Contract Matters listed in clause 4·17 and where such recovery is not
made under or precluded by any other Sub-Contract Condition.
165 The Relevant Sub-Contract Matters are similar to the Relevant Matters in clause 4·18 of the Main Contract. They
include Variations; directions for expenditure of provisional sums (where not for defined work), for opening up or
testing (except in cases of non-compliant work etc.), and in relation to errors, omissions, inconsistencies or
postponement; suspension by the Contractor; material inaccuracy in any Approximate Quantities; or impediment,
prevention or default etc. on the part of the Employer or the Contractor or those for whom they are contractually
responsible. As indicated above, the new statutory right to costs and expenses incurred on suspension by the Sub-
Contractor under clause 4·13 is now dealt with separately in that clause.
166 Clauses 4·16·1 to 4·16·3 contain provisos requiring prompt application and supply of information by the Sub-
Contractor. This is of course particularly important where the Contractor has a corresponding claim under the Main
Contract.
167 Clause 4·18 requires the Contractor to notify the Sub-Contractor within a reasonable time if regular progress of the
Main Contract Works is materially affected by any act, omission or default of the Sub-Contractor, or any of the Sub-
Contractor’s Persons. It also gives the Contractor a corresponding right to recover from the Sub-Contractor any
agreed amount of direct loss and/or expense caused to the Contractor.
168 In considering the effects of clause 1·8, it should be noted that clauses 4·16 and 4·18 are restricted to agreed
amounts of loss and expense; clause 4·19 preserves the rights and remedies of each Party, e.g. the alternative
right to make a claim for damages.
Section 5 – Valuation of Work and Variations

169 The section comprises two sub-sections; first, a General sub-section which includes at clause 5·1 the definition of
Variations and, second, the Valuation Rules.
General (clauses 5·1 and 5·2)
170 The clause 5·1 definition of Variation divides into two parts: the first, clause 5·1·1, consists in alteration or
modification of the design, quality or quantity of the work; the second, the imposition or alteration of obligations or
restrictions affecting either access or the time, method or order of working. (The Sub-Contractor’s right of
reasonable objection under clause 3·5 of ICSub and clause 3·5·1 of the other versions arises only in relation to the
second category.)
171 Clause 5·2 provides that, unless otherwise agreed by the Parties, the Contractor shall:
• where the Adjustment Basis (Article 3A) applies, make a Valuation (i.e. a valuation in accordance with the
Valuation Rules) of all Variations, and of all work which is to be treated as a Variation, all work under directions
as to the expenditure of Provisional Sums and all work for which there is an Approximate Quantity; or
• where the Remeasurement Basis (Article 3B) applies, make a Valuation of all work executed in accordance
with the Sub-Contract Documents or the Contractor’s directions.
The Valuation Rules (clauses 5·3 to 5·8 – and clause 5·9 in ICSub/D)
172 The rules are the same as those that apply under the Main Contract. They differ slightly in format in that there are
two clauses dealing with Measurable Work; clause 5·3, for use where the Adjustment Basis applies, and clause
5·4, for use where the Remeasurement Basis applies. Clause 5·5 makes further provision for certain aspects of
measurable work.
173 Clause 5·6 makes provision for valuing Daywork; a Sub-Contract Particular is provided for the purpose (item 11 in
ICSub and the Design version and item T4 in the Named Sub-Contractor’s Tender). Clause 5·7 makes
consequential provision for any resultant changes in conditions under which other work, outside the scope of the
direction, is executed; clause 5·8·1 is a ‘safety-net’ provision and clause 5·8·2 ties in the rules on loss and expense
with those in clause 4·16. In the Design version, clause 5·9 then applies the principles of clauses 5·3 and 5·4 to
variations in the Sub-Contractor’s Designed Portion; these are valued by reference, where appropriate, to the
SCDP Analysis and with specific allowance for the addition or omission of design work.

Section 6 – Injury, Damage and Insurance
Injury to Persons and Property (clauses 6·2 to 6·5)
174 Following the insurance-related Definitions that comprise clause 6·1, clauses 6·2 to 6·4 set out the liability of the
Sub-Contractor in respect of personal injury and for any injury or damage to property, coupled with an indemnity to
the Contractor for any such liability. Clause 6·4 excludes from that liability and indemnity any loss or damage to the
Main Contract Works and/or Site Materials by any of the Specified Perils, whether or not caused by neglect, breach
of statutory duty, omission or default on the part of the Sub-Contractor or those for whom he is contractually
responsible. In the Named Sub-Contractor version, that exclusion extends also to loss or damage by Specified
Perils to existing structures and their contents, since the Named Sub-Contractor is entitled to such cover where
Insurance Option C applies.
175 Clause 6·5 sets out the Public Liability insurance cover which the Sub-Contractor must take out in respect of his
liability for personal injury or death or for loss, injury or damage to property. The insurance is expressly stated not
to affect the Sub-Contractor’s obligation to indemnify the Contractor. As the footnote to clause 6·5·1·2 indicates,
Sub-Contractors should obtain insurance advice to ensure that their cover is consistent with that obligation and with
the other requirements of clause 6·5. Item 12 of the Sub-Contract Particulars set out the required amount of cover
but the Sub-Contractor, if he wishes, may of course insure for a greater amount.
176 The Contractor has the right to require the Sub-Contractor to produce evidence that he has taken out the
insurances required by clause 6·5·1 and that they are being maintained (clause 6·5·3). If they are not, clause 6·5·4
allows the Contractor himself to take out appropriate cover and recover the cost from the Sub-Contractor.
Insurance of the Works and Site Materials (clauses 6·6 to 6·9)
177 Clause 6·6·1 sets out the cover which the Sub-Contractor obtains from the Joint Names All Risks Policy for the
Works taken out under the Main Contract. By clause 6·9 of the Main Contract Conditions, the Joint Names Policy is
required either to recognise each sub-contractor as an insured or to include a waiver by the relevant insurers of
rights of subrogation against him in respect of loss or damage by the Specified Perils to the Works or relevant
Section, work executed and Site Materials.
178 This requirement in respect of Works insurance applies whichever Insurance Option applies under the Main
Contract; the recognition or waiver is to continue up to and including the date of issue of a certificate or other
document stating that the sub-contractor’s works are practically complete or the date of termination of the sub-
contractor’s employment, if earlier. (Where there are Sections and the sub-contractor’s works relate to more than
one Section, the recognition or waiver for him ceases in relation to a Section upon issue of a certificate or other
document for his work in that Section.)
179 The Sub-Contractor has the right to require the Contractor to produce evidence that the Joint Names Policy for the
Works complies with these requirements (clause 6·6·2) and, if it does not, clause 6·6·3 allows the Sub-Contractor
himself to take out insurance to cover the default and recover the cost from the Contractor.
180 As indicated by the footnote to clause 6·5·1, Sub-Contractors should obtain insurance advice as to cover for risks in
respect of the Sub-Contract Works that is not provided under the Main Contract All Risks Policy, e.g. subsidence,
impact, theft and vandalism.
181 The benefit of the Main Contract Joint Names Policy for the Works may apply only to domestic sub-contractors to
whom the Contractor sub-contracts work in accordance with clause 3·7·1 of the Main Contract Conditions and to
Named Sub-Contractors; it does not apply to sub-subcontractors.
182 It should also be noted that, where Insurance Option C applies under the Main Contract, there is no requirement
under ICSub or the Design version that there should be any cover for domestic Sub-Contractors under the Joint
Names Policy referred to in paragraph C·1, covering the Employer’s existing structures and contents. To the extent
that loss or damage is caused to existing structures and/or their contents by the negligence, breach of statutory
duty, omission or default of a domestic Sub-Contractor or any person for whom he is contractually responsible, the
Sub-Contractor is expressly liable under clause 6·3 and is required to insure against such loss or damage under his
clause 6·5·1 Public Liability policy; this again is a matter of which may require discussion between his insurance
advisers and those of the Contractor and Employer. However, as mentioned above, a Named Sub-Contractor is
entitled to Specified Perils cover under the existing structures policy.
Joint Fire Code (clauses 6·10 to 6·12)
183 The Main Contract Particulars should state whether the Joint Fire Code applies. Where it does, the Contractor and
Sub-Contractor should acquaint themselves with its requirements and liaise both on those and on implementation
of the fire safety plan.
184 The Sub-Contractor is liable for any additional costs of the Contractor incurred in complying with remedial
measures required by insurers as a result of a breach of the code by the Sub-Contractor or those for whom he is

responsible. The Sub-Contractor may however recover the cost of compliance with any alterations in the code
made after the Sub-Contract Base Date.
Professional Indemnity Insurance (clauses 6·14 and 6·15 of the Design version and clause 1·4·4 of
ICSub/NAM/E)
185 Where there is a Sub-Contractor’s Designed Portion, the Sub-Contractor may be required to take out a
Professional Indemnity insurance of the types and with levels of cover not less than those stated in item 12 of the
Sub-Contract Particulars. If no overall level of cover is there stated, Professional Indemnity insurance is not
required. Not all sub-contractors will have, or can obtain, Professional Indemnity insurance either at all or against
certain risks and Contractors must recognise this when seeking to operate the terms of clause 6·14. (Some sub-
contractors may have Product Liability insurance.)
186 The provisions of the two clauses are in substantially the same terms as those in the JCT Collateral Warranties by
a Sub-Contractor (SCWa/P&T, SCWa/F and SCWa/E). In line with other 2011 editions of the JCT contracts, the
Sub-Contract Particulars now make separate provision only for cover against pollution and contamination, still
within the general cover limit. Cross-references apart, there are no changes in the sub-section itself.
187 In the case of Named Sub-Contractors where there is NAM Designed Work, there is provision for a similar
obligation. However, since the Contractor is not responsible for that design work, the provision is a matter between
the Named Sub-Contractor and Employer and is included at clause 1·4·4 of the Intermediate Named Sub-
Contractor/Employer Agreement (ICSub/NAM/E) rather than in the Sub-Contract; it is based on detailed
requirements that are set out in the Invitation to Tender (ICSub/NAM/IT) at item IT16·2 of the Sub-Contract
Information.
Section 7 – Termination
Rights of termination (clauses 7·4 to 7·6 and 7·8 to 7·10)
188 The section provides for termination of the Sub-Contractor’s employment:
• by the Contractor for a default by the Sub-Contractor of any of the types specified in clause 7·4·1, on the Sub-
Contractor’s insolvency (clause 7·5) or for corruption (clause 7·6, which now reflects the Bribery Act 2010);
• by the Sub-Contractor for a default by the Contractor of any of the types specified in clause 7·8·1 or on the
Contractor’s insolvency (clause 7·10); and
• on termination of the Contractor’s employment under the Main Contract (clause 7·9).
189 In the case of default, the non-defaulting Party is required to give the other a warning notice, specifying the
default(s) in question and must allow the defaulting Party a period of not less than 10 days from receipt of that
notice to cease the default. If the default continues beyond that period, the non-defaulting Party has a period of 21
days from the expiry of the 10 day period within which to give notice of termination, which takes immediate effect.
190 If there is a repeat of any specified default, the right to terminate is then re-activated under clause 7·4·3 or 7·8·3, as
appropriate. Subject to clause 7·2·1, referred to below, that right is exercisable immediately and without a further
warning notice.
191 Where the Sub-Contractor is insolvent, notice of termination may be given immediately and with immediate effect
(clause 7·5·1); there is no time limit for notice. Where the Contractor’s employment under the Main Contract
terminates, termination of the Sub-Contract is automatic but the Contractor is required immediately to notify the
Sub-Contractor (clause 7·9).
192 If the Contractor is insolvent, the Sub-Contractor immediately becomes entitled to terminate his employment and
his obligations in respect of the Sub-Contract Works are automatically suspended. However, unless he has already
given notice of default on the part of the Contractor under clause 7·8·1, there is a 3 week moratorium on giving
notice of termination from the date of the insolvency to allow for the exercise of any step-in rights by Employer or
Funder or arrangements with the relevant insolvency practitioner for continuance of the project.
General provisions (clauses 7·1 to 7·3)
193 In relation to rights under section 7, clause 7·1 sets out the meaning of insolvency; clause 7·2 requires all notices,
including warning notices, to be given in accordance with clause 1·7·4 and, at clause 7·2·1, contains the important
proviso that notice of termination by either Party is not to be given unreasonably or vexatiously. (In the 2011
editions, the definition of insolvency has been slightly amended in order to tie in with the minor amendments made
to clause 7·7·3 to accord with section 111(1A) of the Construction Act.)

194 Termination is not irreversible; clause 7·3·2 expressly provides for reinstatement if and on such terms as the
Parties agree. The section is also not exhaustive; as stated in clause 7·3·1, the provisions setting out the rights to
terminate and consequences of termination are without prejudice to the Parties’ other rights and remedies – there
may for example be occasions where there is repudiatory breach by a Party that is not within the specified grounds
for termination but upon which the innocent Party wishes to treat the Sub-Contract as being at an end. Appropriate
advice should however be taken in the case of any proposed termination.
Consequences of termination (clauses 7·7 and 7·11)
195 Where the Contractor terminates the Sub-Contractor’s employment for default, insolvency or corruption, clause 7·7
allows the Contractor to take over the Sub-Contract Works and to employ others to finish them, using the Sub-
Contractor’s plant, equipment and materials (subject to any necessary third party consents) and/or to require the
Sub-Contractor to remove all or any such items. In the Design and Named Sub-Contractor versions, there is
provision for the supply of Sub-Contractor’s design documents not already provided to the Contractor; in the
Named Sub-Contractor version, an additional provision is included at clause 7·7·4 to cover loss and expense
suffered by the Employer and counter any ‘no loss’ arguments that might otherwise be raised.
196 Once the Sub-Contract Works are complete, the Sub-Contractor may make an application for the value of work and
materials that he has executed or supplied, less previous payments. The Contractor may deduct the amount of
direct loss and damage that he has suffered as a result of the termination or recover any excess from the Sub-
Contractor as a debt. The appropriate Payment Notice and/or Pay Less Notice should then be given.
197 If the Sub-Contractor terminates for default or insolvency of the Contractor or termination arises from termination of
the Contractor’s employment under the Main Contract, the Sub-Contractor is required to leave the site as soon as
reasonably practicable. He is also to prepare an account setting out the value of work executed, loss and expense
that has already arisen under the Sub-Contract, his reasonable costs of removal, his expenditure and liabilities for
materials and goods ordered and (where the Sub-Contract or Main Contract is terminated for Contractor default or
insolvency) the direct loss and damage caused to him by the termination. After taking account of payments already
made, the balance (inclusive of retention) is payable within 28 days of submission of the account. Again,
appropriate notices should be given.
198 The cases in which the Sub-Contractor is not entitled to direct loss and damage caused by the termination are (with
one exception) those under clause 8·11·1 of the Main Contract Conditions (termination following extended
suspension of the Main Contract Works through no fault of the Contractor) and termination as a result of non-
availability of terrorism cover or fire etc. damage to existing structures, where the Contractor himself cannot recover
loss and damage under the Main Contract.
199 Users should note clauses 7·7·3 and 7·11·1 which have been slightly modified in the 2011 editions and respectively
provide that, until issue of the final account under clause 7·7·4 or 7·11·3, no further sums become due under the
Sub-Contract. In the case of sums that are due but unpaid where no Pay Less Notice has been given and the last
date for giving such notice has passed, section 111(10) of the Construction Act essentially confirms the position as
that set out in the House of Lords decision in Melville Dundas Ltd v. George Wimpey UK Ltd [2007] UKHL 18. That
is that the sum may still then be validly withheld if termination is on the grounds of insolvency and the insolvency
has occurred after the period for giving a Pay Less Notice has expired, but not if the insolvency occurred before
that expiry and not if the termination was on grounds other than insolvency. If there is any doubt as to the position
in relation to any actual or prospective termination, professional advice should be taken; where sums are due, a
Pay Less Notice should of course be given where that is still practicable.
Section 8 – Settlement of Disputes

200 The Sub-Contract contains provisions in relation to four external means of settling disputes:
• it refers to the possibility of resolving disputes through mediation, using a third party to assist the negotiation
process;
• it gives a contractual right as well as the statutory right to refer disputes to adjudication (Article 4 and clause
8·2); the adjudication is to be conducted in accordance with the Scheme for Construction Contracts, subject
only to the clause 8·2 provisions regarding the nomination of adjudicators and for cases of opening up and
testing;
• the Sub-Contract Particulars for Article 5 (item 2) provide the option of agreeing to refer disputes to arbitration,
by making the appropriate entry in them; the Parties may subsequently agree to do so. The arbitration
agreement in SBCSub is subject to the three exceptions mentioned in Article 5 and provides that an arbitration
under it is to be conducted in accordance with the JCT 2011 edition of the Construction Industry Model
Arbitration Rules (CIMAR);

• in relation to litigation, and subject to any agreement to arbitrate, Article 6 records the jurisdiction of the English
Courts; selection of another jurisdiction requires an appropriate amendment.
Mediation (clause 8·1) and ADR
201 The JCT supports the use of mediation, ADR or ENE (Early Neutral Evaluation) in appropriate cases, but considers
that it would not be appropriate to endorse specific techniques or bodies. The variety of techniques and bodies that
have developed over recent years would appear to suggest that such choices are frequently better made by the
Parties when the dispute has actually arisen and its nature is clear: in cases where mediation is likely to assist,
possible exposure to litigation costs under the Civil Procedure Rules may be sufficient incentive for the Parties to
agree such matters.
Adjudication (clause 8·2)
202 In the case of adjudication, the adjudicator may be named and the nominating body identified in the Sub-Contract
Particulars (but see the comments above on item 14 of the Sub-Contract Particulars).
Arbitration (clauses 8·3 to 8·8) and litigation (Article 6)
203 A range of factors, which are outside the scope of this Guide, will determine the choice between arbitration and
litigation. Litigation is the default position and will apply unless the Parties specifically make arbitration operative.
204 Where arbitration is agreed under the Sub-Contract and CIMAR Rules apply, Rule 2.3 in effect provides that an
arbitrator cannot be named by the appointor identified in the Sub-Contract Particulars until at least 14 days after the
arbitration notice is served and it is only after that period, if no agreement is reached as to who is to act as
arbitrator, that either Party has the right to apply to the appointor, requesting him to name the arbitrator. The award
of the arbitrator is final and binding on the Parties except in respect of any question of law arising in the course of
the reference or arising out of an award, which (by clause 8·7) the Parties agree may be referred to the courts.
Schedule 1 – Form of Bond

205 Schedule 1 sets out the form of the bond for payment in respect of off-site materials and/or goods (Listed Items).
The form has been agreed between the JCT and the British Bankers’ Association (BBA). The Contractor’s approval
of the proposed surety in each case should wherever practicable be obtained before execution of the Sub-Contract.
206 If a Sub-Contractor encounters any difficulties over the terms of the bond with the local bank branch from which he
seeks the bond, then, assuming the bank is a member of the BBA, he should request that they refer the matter to
the bank’s head office, which should then confirm that, as the terms have been agreed by the BBA, they are
acceptable.
Schedule 2 – Fluctuations Option(s)

207 The Fluctuations Option in Schedule 2 of the ICSub and Design version Conditions mirror that in Schedule 4 of the
Main Contract Conditions. If this Fluctuations Option applies and the Sub-Contractor sub-lets any portion of the
Sub-Contract Works to a sub-subcontractor, he is required by paragraph 3·1 to include in the sub-subcontract
provisions similar to those which apply to this Fluctuations Option in his own Sub-Contract.
208 The Sub-Contractor is required to give notice to the Contractor of any of the events listed in paragraph 4·1 in order
to enable the Contractor to comply with paragraph 4·1·4 in Schedule 4 of the Main Contract Conditions. This Sub-
Contract requirement may be varied by agreement between the Contractor and the Sub-Contractor in accordance
with paragraphs 5, but before the Contractor makes any such agreement with the Sub-Contractor he should ensure
that it is acceptable to the Quantity Surveyor under the Main Contract. (See paragraphs 5 of Schedule 4 of the
Main Contract Conditions.)
209 In the Named Sub-Contract Conditions Schedule 2 contains an additional option, Fluctuations Option C (Formula
adjustment), commented on above in the context of clause 4·15 above.
Schedule 3 – Supplemental Sub-Contract Provisions

210 These reflect the Achieving Excellence in Construction and similar principles that are also incorporated in the JCT
Framework Agreement. As indicated above, any applicable Framework should be recorded in the Sub-Contract
Particulars and the Supplemental Provisions will apply unless individually disapplied by the Sub-Contract
Particulars (item 1).

211 For consistency these provisions may need to be disapplied where there is a Framework Agreement or other
contract documentation that covers the same ground. More detailed coverage of such issues is commonplace and
is often quite properly contained in the Preliminaries rather than in contract conditions.
212 In terms of individual Supplemental Provisions, the following may be mentioned:
Collaborative working
213 This is a simple restatement of the principle that underpins most of the other AEC principles.
Health and safety
214 Complementing the express undertakings to comply with Health and Safety legislation (clauses 3·17 and 3·18), this
Supplemental Provision (at paragraph 2·2·1 of the Schedule) adds an obligation to comply with non-statutory HSE
and HSC approved codes, which is clearly good practice, and, highlights specific training and consultation aspects
of the legislation.
Cost savings and value improvements
215 Members of the consultant team generally are professionally bound to report potential value improvements of which
they are aware. Contractors and sub-contractors should be encouraged to do the same and it is not unreasonable
that they should receive a fair share of the benefit for doing so. When making suggestions, however, care should
be taken about the possible assumption of design liabilities.
216 It is of course during the pre-construction period, not during the construction phase, that the Employer, assisted by
the Contractor and relevant specialist sub-contractors as well as his consultant team, is able to derive the greatest
benefit from value-engineering exercises. It is to cover that earlier period that the JCT has produced its two Pre-
Construction Services Agreements, PCSA (between Employer and Main Contractor) and PCSA/SP (between
Employer or Main Contractor and a Specialist).
217 Further opportunities for value engineering do arise, often in the context of prospective variations, but provisions of
this type are not straightforward. In cases where the matter principally benefits the Employer rather than the
Contractor, for instance, the Contractor and Sub-Contractor will wish to be paid their share of the benefit to the
Employer on completion of the work. On the other hand it may be difficult for several – perhaps many – years to
establish the true benefit to the Employer, in particular where it consists in lower operating or life-cycle costs. It is
difficult to prescribe particular sharing arrangements covering such a wide field of possible benefits. Adjustments
also have to be made for the value/cost of the additional work involved and/or the saving to the Employer or the
Parties from any resultant omissions.
218 This Supplemental Provision is therefore limited to giving the Sub-Contractor a measure of protection for proposals
that he originates and puts forward under the provision by making any direction to implement them conditional upon
those terms being agreed. As there is no standard approach, it is impractical in the Sub-Contract to cover
methodology or share of benefits.
219 There may be other interrelated matters to be agreed – not only in terms of price but also matters such as design
liability (on which a Sub-Contractor may wish to reserve his position in making the proposal). In this context, the
paragraph 3·2 reference to the Sub-Contractor’s quotation is intended merely to connote a considered, bona fide
estimate rather than a complete, legally binding offer.
Sustainable development and environmental considerations
220 This Supplemental Provision is often linked to the previous provision. The legislative framework has historically
been the principal driver for sustainable development and on environmental issues generally but, for many clients,
sustainability is now becoming an increasingly important commercial factor. Decisions on these matters are
principally matters for the client and his professional team and generally fall to be made during the pre-construction
period; they and the Contractor have continuing control over further design work and selection of materials by the
Sub-Contractor during the construction period. However, the JCT, which has taken and continues to take an active
role in establishing common ground on contractual provisions, recognises both the need for positive continuing
dialogue reflected in paragraph 4·1 and, in terms of paragraph 4·2, the importance of proper information on the
environmental impact of materials and goods selected by the Sub-Contractor being available as part of the
contractual approval processes.
Performance Indicators and monitoring
221 Performance indicators are generally most relevant to Frameworks and other longer-term agreements where there
is benchmarking of performance against competitors as part of contract-allocation or other incentive arrangements.
However, those indicators may also perform a valuable role in individual contracts and sub-contracts, for project-
specific incentives, (pre-)qualification purposes and the like.

222 It is important that the indicators and targets should be clearly stated or identified, normally as part of the
Preliminaries, that performance should be regularly and properly monitored and that assessments should be made
strictly in accordance with the indicators/targets.
Notification and negotiation of disputes
223 In terms of avoidance or early resolution of actual or potential disputes, it makes obvious sense that each Party
should notify disputes promptly and nominate an employee of sufficient seniority and authority with a view to
resolving them quickly. Such provisions have for many years been commonplace in the field of general commercial
agreements, frequently coupled with express agreement that a specified period will be allowed to the Parties’
appointees to resolve the matter before steps are taken to initiate any external dispute resolution procedure.
224 As indicated by the reference to Article 4 at the beginning of the provision, section 108 of the Construction Act
requires that a construction contract should enable a party to give notice at any time of his intention to refer a
dispute to adjudication, so that there cannot in construction contracts (within the meaning of the Act) be any
prescribed period of delay in respect of any reference to adjudication.
225 The costs of adjudication are generally less than those of litigation or arbitration, but they are not inconsiderable
and are often not recoverable. If a dispute arises, whether or not this Supplemental Provision applies, the Parties
should consider whether to allow a reasonable period for negotiation before recourse to adjudication or other
external means of resolving the dispute.

Appendix A – ICSub 2011 changes
The following provisions in 2011 Edition contain textual changes. The provisions with substantive textual changes
have been identified with *. For an explanation of those changes, please refer to the main body of the Guide.
2011 numbering 2011 numbering
Agreement (ICSub/A, ICSub/D/A) Conditions (ICSub/C, ICSub/D/C,

ICSub/NAM/C)
Recitals
Fourth (ICSub/A) Conditions (clauses)
Eighth (ICSub/D/A) 1·1: Default Payment Notice*
Final Payment
Articles Final Release Date*
Article 1 Fluctuations Option (ICSub/C,
Article 5 ICSub/D/C)
Listed Items (ICSub/C, ICSub/D/C)
Sub-Contract Particulars (entries) Minimum Retained Amount*
Item 1 NAM Tender and Agreement
Item 6·4 (ICSub/NAM/C)
Item 7* Numbered Documents (ICSub/C,
Item 8 ICSub/D/C)
Item 9 Pay Less Notice*
Item 10 Payment Application*
Item 11 Payment Notice*
Item 12 SCDP Analysis (ICSub/D/C)
Item 13 Sub-Contract Agreement
Item 14 Sub-Contractor’s Proposals
Item 15 (ICSub/D/C)
1·4·5
Schedule of Information (entries) 1·8·1 introduction, 1·8·1·4, 1·8·2*, 1·8·3, 1·8·4*
Item 1·5 2·1
2·11·2, 2·11·4
ICSub/NAM 2·12·1
2·13·2·1, 2·13·5, 2·13·6
ICSub/NAM/IT (items) 2·14
IT1 2·16*
IT4 2·17
IT6 3·3·2·2
IT11·4 3·14·2, 3·14·3
IT12* 3·18·2, 3·18·4
IT13 3·19
IT14 4·3·2·3, 4·3·3·6, 4·3·3·7*, 4·3·3·8
IT15 4·4·4*, 4·4·5, 4·4·6
IT16 4·6·2
IT17 4·9*
IT18 4·10*
4·11·4 (ICSub/C, ICSub/D/C)
ICSub/NAM/T (items) 4·12*
T3 4·13*
4·14*
ICSub/NAM/A 4·15 (ICSub/C, ICSub/D/C)
First Recital 4·17·2·1, 4·17·3 to 4·17·7
Second Recital 5·6·1, 5·6·2 (ICSub/C, ICSub/D/C)
Article 5 6·1: Excepted Risks*
Terrorism Cover*
6·5·1·2 (ICSub/C, ICSub/D/C)
6·6·2
6·7·1·1, 6·7·1·hanging paragraph,
(ICSub/C, ICSub/D/C) 6·7·8
6·8·1*, 6·8·2
6·12·1, 6·12·2, 6·12·4
6·14·1, 6·14·2 (ICSub/D/C)

2011 numbering
7·1*
7·6
7·7·1, 7·7·3*, 7·7·4, (ICSub/NAM/C) 7·7·5
7·11·1, 7·11·4·2
8·3
Schedules
Schedule 2 (ICSub/C, ICSub/D/C):
paragraph 3·1
paragraph 12 hanging paragraph

Appendix B – Specimen Activity Schedule
(See the Third Recital (Seventh in ICSub/D/A) and clause 4·10.)
Mechanical services
A Heating installation 235,000.00

B Hot water installation 6,000.00
C Cold water installation including rising main and tank 14,000.00
D Gas installation 2,500.00
E Mechanical ventilation 25,000.00
F Controls and wiring 9,000.00
G Testing and commissioning 3,000.00
H As installed record drawings 1,500.00
J Operation and maintenance manuals 1,000.00
£297,000.00
Electrical services
A Distribution boards, switchgear and sub mains cabling 28,000.00

B Power installation 72,000.00
C Lighting installation including fittings 92,000.00
D Fire alarm system 14,500.00
E Security system 6,000.00
F Earthing and bonding 5,000.00
G Testing and certification 2,500.00
H As installed record drawings 1,250.00
J Operation and maintenance manuals 750.00
£222,000.00

Appendix C – Named Sub-Contract Procedures under IC and ICD
2011
Procedures
Clause 3·7 and Schedule 2 of IC and ICD 2011 provide a framework for part or parts of the Works to be carried out
by a Named Sub-Contractor, i.e. a person named by the Employer or Architect/Contract Administrator who is to be
employed by the Contractor as a sub-contractor on the basis of the JCT Intermediate Named Sub-Contract Tender
& Agreement (ICSub/NAM). The process of obtaining tenders in order to select the Named Sub-Contractor is
normally managed by the Architect/Contract Administrator.
As stated in paragraph 12 of Schedule 2, these provisions do not apply to the execution of part of the Works by a
Statutory Undertaker acting in that capacity. Where the Main Contract is ICD, i.e. where it includes elements of
design by the Contractor, the Named Sub-Contract procedure must also not be used in relation to work (or its
design) that fails within the Contractor’s Designed Portion.
The Named Sub-Contractor may be named under the Main Contract in one of two ways:
• ‘Procedure One’, i.e. naming in the Contract Bills/Specification/Work Schedules at the tender stage, under
which the Contractor prices the sub-contract work described; or
• ‘Procedure Two’, i.e. naming in an instruction as to the expenditure of a provisional sum included in whichever
of those documents applies.
The Contractor should ensure that he is given a full description of the work, either in the Contract
Bills/Specification/Schedules of Work where Procedure One applies or in an instruction under Procedure Two,
together with details of the Named Sub-Contractor’s tender, as referred to in the Third Recital of IC (in ICD, the
Fourth) and in paragraph 5·2 of Schedule 2.
Where the sub-contractor is named under Procedure One in advance of the Contractor being selected, it is
important that prospective Contractors also take full account of the Named Sub-Contractor’s requirements and, if
they have concerns, raise the matter with the Architect/Contract Administrator in good time before the submission
of Main Contract tenders. (See also the footnotes to the Named Sub-Contract Agreement (ICSub/NAM/A)
regarding Numbered Documents.)
In the case of Procedure One, paragraph 2 of Schedule 2 provides that:
• if the Contractor is unable to enter into a sub-contract with the sub-contractor named in the Contract
Documents, then, provided that the Architect/Contract Administrator is satisfied with the reasons given, he is
required to issue further instructions; and
• at any time before the Contractor has entered into a sub-contract with the sub-contractor named, the
Architect/Contract Administrator may, by omitting the work and substituting a provisional sum, instruct that
another person shall carry out the work.
In the case of Procedure Two the Contractor has a right of reasonable objection, exercisable within 14 days of the
instruction, and any inability to enter into the sub-contract may be dealt with by the Architect/Contract Administrator
issuing a further instruction as to expenditure of the provisional sum.
Once appointed and design liability apart, the relationship between the Contractor and the Named Sub-Contractor
is generally the same as that with a domestic sub-contractor. However, if the Contractor becomes aware of events
that may lead to termination of a Named Sub-Contractor’s employment, the Contractor must notify the
Architect/Contract Administrator; if termination then takes place because of the default or insolvency of the Named
Sub-Contractor or, with the Architect/Contract Administrator’s consent, the Contractor is entitled to some relief from
the financial consequences.
Use of Intermediate Named Sub-Contract Tender & Agreement (ICSub/NAM)
Both procedures involve the use of ICSub/NAM, which is divided into three parts:
• Invitation to Tender (ICSub/NAM/IT), to be completed by the Architect/Contract Administrator. This part gives
particulars of the Main and Sub-Contract Works, together with indications of the sub-contract programme, the
basis of fluctuations etc;

• Tender (ICSub/NAM/T), to be completed by the tendering sub-contractor. This requires quotation of a sub-
contract sum together with the percentage additions to the prime cost of daywork. In addition, there is provision
for any additional attendances or other special requirements, programme information and details of fluctuations
arrangements, to the extent not already stated in the Invitation to Tender;
• Agreement (ICSub/NAM/A), to be completed and executed by the Contractor and the chosen sub-contractor.
This incorporates by reference the Intermediate Named Sub-Contract Conditions (ICSub/NAM/C) and includes
as Numbered Documents the appropriate sub-contract tender documents.
Intermediate Named Sub-Contract Conditions (ICSub/NAM/C)
As indicated in the main body of the Guide, these Conditions are similar to those of the other Intermediate Sub-
Contracts (i.e. ICSub/C and ICSub/D/C) with only minor adjustments, principally reflecting the fact that the Named
Sub-Contractor’s obligations with regard to design, PI insurance and collateral warranties are matters to be dealt
with directly between him and the Employer and contained in the Intermediate Sub-Contractor/Employer
Agreement, as referred to below.
Design of sub-contract works
The Named Sub-Contract procedures are intended primarily for work involving a specialist’s design input, which
commonly appears to be required even where the installation or other specialist work involved is not of an unduly
complex nature. Under paragraph 11·1 of Schedule 2 in the Main Contract Conditions, the Contractor is in such
cases expressly relieved of responsibility to the Employer for defects in the Named Sub-Contractor’s design of the
sub-contract work. However, this relief does not affect the Contractor’s obligation in regard to the supply of goods,
materials and workmanship.
Since the Contractor is relieved of responsibility for the Named Sub-Contractor’s design, it is important that the
Employer obtains suitable warranties or undertakings from the Named Sub-Contractor during the tender process, in
or based on the form of the JCT Named Sub-Contractor/Employer Agreement, though such an agreement may be
kept separate from the ICSub/NAM Tender and its terms need not be disclosed to the Contractor.
Intermediate Named Sub-Contractor/Employer Agreement (ICSub/NAM/E)
The Intermediate Named Sub-Contractor/Employer Agreement (ICSub/NAM/E) contains undertakings by the

Named Sub-Contractor to use reasonable skill and care in his design work and the selection of materials and
goods and also to satisfy any relevant performance specifications. Those undertakings are substantially in the
terms of the JCT Collateral Warranty SCWa/E and the benefit of the Agreement is, within the usual limits,
assignable by the Employer. In addition, there is provision for the Named Sub-Contractor to give collateral
warranties to such purchasers, tenants and/or funder as are identified in the relevant Schedule. The latter is
important because, as indicated in the footnotes to Part 2 of the Contract Particulars in both Intermediate Building
Contracts, collateral warranties by the Named Sub-Contractor are intended to be dealt with by the direct
undertaking to the Employer contained in this Agreement; there is no provision for collateral warranties in the
Named Sub-Contract Agreement or Conditions.
The Intermediate Named Sub-Contractor/Employer Agreement is intended to be entered into on selection of a

Named Sub-Contract tender or approximate estimate. It also is designed to facilitate preliminary design work and
procurement by the Named Sub-Contractor where lead times require and the potential requirements can be stated.
In relation both to design information supplied and such procurement, there is an undertaking by the Employer to
meet the Named Sub-Contractor’s reasonable costs if through no fault of the latter there is no resultant Named
Sub-Contract with the Contractor.
The Agreement recognises that, to facilitate the process, other payments by the Employer may be required and
contains a degree of flexibility in relation to ‘instruction to proceed’ aspects.
Pricing
The Contractor is responsible for paying the Named Sub-Contractor in the same way as his own domestic sub-
contractors; the Named Sub-Contractor’s work is not made the subject of a prime cost sum in the Contract
Documents. Accordingly:
• where the Named Sub-Contractor is named under Procedure One, the Contractor must take into account the
description and particulars given and, in addition to the Named Sub-Contractor’s price, include in his price or
tender sum an amount for managing and supervising execution of the Named Sub-Contract work (see also the
following, final sub-section of this Guide);
• where Procedure Two applies, the Employer pays the Contractor for managing and supervising the execution
of the work by the Named Sub-Contractor either such amount as is agreed between the Employer and
Contractor or the amount determined by the Quantity Surveyor by way of a Valuation under clause 5·2.

Consequences of termination
The Named Sub-Contract Conditions at section 7 include the normal JCT sub-contract provisions for termination of
a sub-contractor’s employment and the consequences in terms of the Sub-Contract.
However, paragraph 6 of Schedule 2 in the Main Contract Conditions requires the Contractor to liaise with the
Architect/Contract Administrator regarding any prospective termination for default, insolvency or corrupt act on the
part of the Named Sub-Contractor and requires the Contractor to obtain the Architect/Contract Administrator’s
consent before he accepts termination or repudiation by the Named Sub-Contractor.
Paragraph 7 of Schedule 2 then provides the Architect/Contract Administrator in the event of such termination with
the options, exercisable by instructions, of naming another sub-contractor (subject to the Contractor’s right of
reasonable objection), allowing the Contractor to arrange for carrying out the work either by himself or through an
approved domestic sub-contractor, or omitting the work from the main contract.
The Contractor should ensure that such instructions are given promptly so that he receives an appropriate
extension of time and also needs to take into account that he generally is not entitled to recover from the Employer
any loss and expense arising from the termination or the costs of repair of any defects in the terminated sub-
contractor’s work (for which he, the Contractor, remains responsible) (see paragraph 8 of Schedule 2). Under
paragraph 10·2, he is also under a duty to use reasonable endeavours to recover from the terminated sub-
contractor the amounts referred to in paragraph 10·2·1, and to account to the Employer for amounts recovered.

Appendix D – ICSub and ICSub/D User Checklist
This is a checklist of the key information that will help you to complete the Sub-Contract Agreement (ICSub/A or
ICSub/D/A).
Parties’ details
□ Contractor’s name and address
□ Sub-Contractor’s name and address
Sub-Contract Works
□ description
Main Contract Works
□ description
□ location
Sub-Contractor’s Designed Portion (Third Recital in ICSub/D/A)
□ description
Valuation basis (Fifth Recital in ICSub/D/A; Articles 3A and 3B)
□ Adjustment Basis (Article 3A) or Remeasurement Basis (Article 3B)?
Sub-Contract Sum (Article 3A)
□ amount
Sub-Contract Tender Sum (Article 3B)
□ amount
Activity Schedule (Third Recital in ICSub/A; Seventh Recital in ICSub/D/A)
□ Has the Sub-Contractor provided a priced Activity Schedule?
Conditions (Sub-Contract Particulars (item 1))
□ Amendment numbers incorporated in the Sub-Contract Conditions
□ Is there a Schedule of Modifications?
Framework Agreement (Sub-Contract Particulars (item 1))
□ Is the Sub-Contract supplemented by Framework Agreement(s)?
□ details (date, title, parties)
Supplemental Sub-Contract Provisions (Sub-Contract Particulars (item 1))
Collaborative working (Schedule 3, paragraph 1)
□ applicable?

Health and safety (Schedule 3, paragraph 2)
□ applicable?
Cost savings and value improvements (Schedule 3, paragraph 3)
□ applicable?
Sustainable development and environmental considerations (Schedule 3, paragraph 4)
□ applicable?
Performance Indicators and monitoring (Schedule 3, paragraph 5)
□ applicable?
Notification and negotiation of disputes (Schedule 3, paragraph 6)
□ applicable?
□ name of the Contractor’s nominee
□ name of the Sub-Contractor’s nominee
Arbitration (Sub-Contract Particulars (items 2 and 14))
□ applicable?
□ appointor of Arbitrator?
Sub-Contract Base Date (Sub-Contract Particulars (item 3))
□ date
Address for notices (Sub-Contract Particulars (item 4))
□ Contractor
□ Sub-Contractor
Programme (Sub-Contract Particulars (item 5))
Preparation of drawings etc. (item 5·1 (ICSub/D/A))
□ period
Contractor’s initial comments on drawings etc. (item 5·2 (ICSub/D/A))
□ period
Procurement of materials etc. and delivery prior to commencement of work (item 5·3 (ICSub/D/A)/item 5·1
(ICSub/A))
□ Sub-Contract Works: period

□ Sections: period
Total period of items 5·1 to 5·3 (ICSub/D/A)
□ total period
Sub-Contractor’s CDM Planning Period (item 5·4 (ICSub/D/A)/item 5·2 (ICSub/A))
□ period

Notice to commence work on site (inclusive of the Sub-Contractor’s CDM Planning Period) (item 5·5
(ICSub/D/A)/item 5·3 (ICSub/A))

□ Sections: period
Carrying out of the Sub-Contract Works on site (item 5·6 (ICSub/D/A)/item 5·4 (ICSub/A))

□ Sections: period for each Section
Further programming details (item 5·7 (ICSub/D/A)/item 5·5 (ICSub/A))
□ details
Attendance (Sub-Contract Particulars (item 6))
Attendance items (item 6·1)
□ list
Joint Fire Code (item 6·2)
□ applicable?
□ additional attendance items
□ Are the Main Contract Works a ‘Large Project’?
Sub-Contractor’s temporary buildings (item 6·3)
□ Are the temporary buildings to be located within the building under construction or within six metres of
it?
□ Is the Contractor responsible for connecting the fire detection system to a central station?
Clearance of rubbish (item 6·4)
□ How is rubbish to be disposed of?

Interim payments – due dates (Sub-Contract Particulars (item 7))
□ first due date (clause 4·9·1)
□ Minimum Retained Amount
□ Final Release Date
□ Date for Completion for the Main Contract Works (or last Section)
□ Rectification Period for the Main Contract Works (or last Section)
Interim payments – percentages of value (Sub-Contract Particulars (item 8))
□ percentage of value before practical completion
□ percentage of value on and after practical completion
Listed Items (Sub-Contract Particulars (item 9))
□ list
Bond for Listed Items
□ applicable?
□ amount of bond

Fluctuations Option – Contributions, levy and tax fluctuations (Sub-Contract
Particulars (item 10))
□ applicable?
□ percentage addition (paragraph 12)
Dayworks (Sub-Contract Particulars (item 11))
(Where a Schedule of Daywork Rates is not included in the Numbered Documents)
□ Definition(s)
□ Labour: Percentage Addition or All-Inclusive Rates?
□ wage fixing body/bodies: identification
□ All-Inclusive Rates: details
□ Materials: Percentage Addition
□ Plant: Percentage Addition
Insurance: Sub-Contractor’s liability – personal injury and property damage
(Sub-Contract Particulars (item 12))
□ amount
Sub-Contractor’s Designed Portion Professional Indemnity insurance (Sub-
Contract Particulars (item 12 (ICSub/D/A)))
□ type, amount, expiry
SCDP PI insurance sub-limit: Cover for pollution and contamination claims
□ applicable?
□ amount
Incorporation of Sub-Contract Works into Main Contract Works (Sub-Contract
Particulars (item 13))
□ elements of Sub-Contract Works, extent of incorporation
Adjudication (Sub-Contract Particulars (item 14))
□ Adjudicator’s name?
□ Adjudicator nominating body?
Numbered Documents (Sub-Contract Particulars (item 15))
□ identification
Attestation
□ Execution under hand
□ Execution as a Deed
□ Other forms of Attestation needed?

Main Contract (Schedule of Information (item 1))
Employer (item 1·1)
□ name
Architect/Contract Administrator (item 1·2)
□ name
CDM Co-ordinator (item 1·3)
□ name
Principal Contractor (item 1·4)
□ name
Main Contract Conditions (item 1·5)
□ version: IC or ICD? (ICSub/A)

□ Amendment numbers incorporated in the Main Contract Conditions
□ Is there a Schedule of Modifications?
Main Contract Particulars (item 1·7)
□ subsequent changes
Sections (item 1·8)
□ Are the Main Contract Works divided into Sections?

□ identification of document containing details
Other relevant documents (item 1·9)
□ list
Construction Phase Plan (Schedule of Information (item 2))
□ applicable? (Is the project notifiable under the CDM Regulations 2007?)
Programme Information (Schedule of Information (item 3))
Starting date (item 3·1)
□ earliest
□ latest
Site closed (item 3·2)
□ dates
Site open (item 3·3)
□ hours, exception

Appendix E – Related Publications
As well as the three Intermediate Sub-Contracts and the Intermediate Named Sub-Contractor/Employer Agreement
(ICSub/NAM/E) referred to in this Guide, the following documents have been issued by the JCT for use with the
2011 edition of the Intermediate Building Contract:
• Short Form of Sub-Contract (ShortSub)
• Sub-subcontract (SubSub)
• Collateral Warranties
• Contractor Collateral Warranty for a Purchaser or Tenant (CWa/P&T)
• Contractor Collateral Warranty for a Funder (CWa/F)
• Sub-Contractor Collateral Warranty for a Purchaser or Tenant (SCWa/P&T)
• Sub-Contractor Collateral Warranty for a Funder (SCWa/F)
• Sub-Contractor Collateral Warranty for Employer (SCWa/E)
and the following, which are equally applicable to the Intermediate Sub-Contract:
• Partnering Charter (Non-binding)
• Framework Agreement (FA) and

Framework Agreement Guide (FA/G)
• Pre-Construction Services Agreement (General Contractor) (PCSA)

Pre-Construction Services Agreement (Specialist) (PCSA/SP)
• Adjudication Agreement (Adj) and

Adjudication Agreement (Named Adjudicator) (Adj/N)
• JCT 2011 edition of the Construction Industry Model Arbitration Rules (CIMAR)

Guide 2011
MEMBERS
British Property Federation Limited
Contractors Legal Grp Limited
Local Government Association
National Specialist Contractors Council Limited
Royal Institute of British Architects
ICSub/G 2011
The Royal Institution of Chartered Surveyors
Scottish Building Contract Committee Limited
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Guide 2011
any user or any third party in connection with such use.
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INTERMEDIATE BUILDING CONTRACT
SWEET & MAXWELL

JCT INT Sub-Contractor Guide

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Guide 2011

© The Joint Contracts Tribunal Limited 2011

Sub-Contracting under IC and ICD 2011 4

Consent to domestic sub-contracting

Section 1 – Definitions and Interpretation 12

Definitions (clause 1·1)

Section 2 – Carrying out the Sub-Contract Works 13

Sub-Contractor’s general obligations (clauses 2·1 to 2·3)

Section 3 – Control of the Sub-Contract Works 16

Assignment and Sub-contracting (clauses 3·1 to 3·3)

© The Joint Contracts Tribunal Limited 2011 ICSub/G 2011 Page i

Section 5 – Valuation of Work and Variations 20

General (clauses 5·1 and 5·2)

Section 6 – Injury, Damage and Insurance 21

Injury to Persons and Property (clauses 6·2 to 6·5)

Rights of termination (clauses 7·4 to 7·6 and 7·8 to 7·10)

Section 8 – Settlement of Disputes 23

Mediation (clause 8·1) and ADR

Schedule 1 – Form of Bond 24

Schedule 2 – Fluctuations Option(s) 24

Schedule 3 – Supplemental Sub-Contract Provisions 24

Appendix A – ICSub 2011 changes 27

Appendix B – Specimen Activity Schedule 29

Appendix C – Named Sub-Contract Procedures under IC and ICD 2011 30

Appendix D – ICSub and ICSub/D User Checklist 33

Appendix E – Related Publications 38

Page ii ICSub/G 2011 © The Joint Contracts Tribunal Limited 2011

2 The Guide covers all three Intermediate Sub-Contracts, namely:

• Intermediate Sub-Contract (ICSub);

• Intermediate Sub-Contract with sub-contractor’s design (ICSub/D); and

• Intermediate Named Sub-Contract (ICSub/NAM).

3 In terms of intended use:

Purpose of the 2011 editions

© The Joint Contracts Tribunal Limited 2011 ICSub/G 2011 Page 1

11 The amendments to the Construction Act also:

Content of the Guide

16 The commentary on the Agreement and Conditions is followed by:

Appendix A – ICSub 2011 changes

Appendix B – Specimen Activity Schedule

Appendix C – Named Sub-Contract procedures under IC and ICD 2011

Page 2 ICSub/G 2011 © The Joint Contracts Tribunal Limited 2011

Appendix E – Related Publications.

© The Joint Contracts Tribunal Limited 2011 ICSub/G 2011 Page 3

Consent to domestic sub-contracting

Sub-contract tendering – information requirements

• any other annexes or information directly relevant to the proposed sub-contract.

Page 4 ICSub/G 2011 © The Joint Contracts Tribunal Limited 2011

• the requirements for collateral warranties from the Sub-Contractor.

© The Joint Contracts Tribunal Limited 2011 ICSub/G 2011 Page 5

• the Articles (1 to 6);

• the Sub-Contract Particulars (items 1 to 15);

• the Attestation forms; and

• the Schedule of Information.

Page 6 ICSub/G 2011 © The Joint Contracts Tribunal Limited 2011

• the documents referred to in and annexed to the Schedule of Information;

• the Sub-Contract Conditions; and

• the Numbered Documents.

38 This contains alternative provisions, Articles 3A and 3B:

© The Joint Contracts Tribunal Limited 2011 ICSub/G 2011 Page 7

44 The entries here are intended to identify:

• any JCT Amendments that apply to the Conditions;

Sub-Contract Base Date (Item 3)

Address for notices (Item 4)