Common Scenario

A subcontractor successfully completes a project and submits their final account for payment. Confident in the quality of their work and the project’s timely completion, the subcontractor anticipates a straightforward payment process. They had even received verbal assurances from the main contractor along the way, with no formal issues raised about progress or performance.

Problem

Upon receiving the final account, the main contractor unexpectedly counters with a significant claim for liquidated damages (LDs) due to alleged delays. They also dispute several variations that had previously been agreed upon, drastically reducing the value of those items. This is the first time the subcontractor has heard any concerns about delays or the validity of their variations.

The main contractor had not issued any official notices during the project, as required by the contract, to notify the subcontractor of these alleged issues. As a result, the subcontractor had no opportunity to address or mitigate any delays while work was ongoing. Now, facing a large claim and potential losses, the subcontractor feels pressured to settle quickly to avoid perceived legal fees.

Outcome Without Commercial Mate

Without a commercial manager or expert guidance, the subcontractor negotiates down the LDs to a reduced amount and accepts a lower value on the variations, despite having grounds to dispute both claims. They decide this approach is simpler and potentially less costly than pursuing a legal route, even though it means accepting significant financial losses. In the end, they walk away with a fraction of the payment they initially expected, impacting their profitability and cash flow.

Outcome With Commercial Mate

Contractual Awareness: With Commercial Mate, the subcontractor would have clear guidance on the specific requirements around variations and liquidated damages in their contract, helping them understand their rights and responsibilities from the start.

Proactive Tracking and Documentation: Using support templates to track communications and variations, the subcontractor could document verbal assurances and milestones. This documentation would strengthen their position against the main contractor’s claims, providing solid evidence of performance and agreed variations.

Timely Expert Advice: By accessing unlimited consultations, the subcontractor could receive on-the-spot advice, reinforcing their grounds to dispute the LDs due to the lack of formal notices and allowing them to negotiate confidently.

Dispute Mitigation Strategy: Equipped with risk assessment tools, the subcontractor would have early insight into potential dispute scenarios, enabling them to manage and mitigate claims throughout the project.

With Commercial Mate, the subcontractor would have protected their profits, securing fair payment and avoiding unnecessary losses.