The Subcontractor's Shield: Using Insurance Clauses to Defeat Unfair Back-Charges and Set-off claims in QLD
- John Merlo
- Oct 8
- 20 min read
The email lands in your inbox late on a Friday afternoon. The subject line from the head contractor is simple: "Back-charge and Set-off for Site Damages - Project XYZ." Your stomach sinks. Inside is a vague claim for thousands of dollars, alleging your team was responsible for damage to another trade's work, with a threat to deduct the amount from your next progress payment. It’s a stressful, all-too-common scenario for subcontractors across Queensland. You know the claim is unfair, but you feel powerless, trapped between finishing the job and losing money you’ve rightfully earned.
This is where most subcontractors make a critical mistake: they either argue emotionally or accept the charge to avoid conflict. But what if you had a shield? What if the very subcontract you signed contained the precise legal tools to dismantle this claim before it costs you a cent? This guide is not about passively understanding insurance; it is an active, defensive strategy manual. Your subcontract and its insurance clauses are instruments of empowerment. By understanding how to wield them, you can proactively challenge and defeat unsubstantiated back-charges and set-off, shifting the burden of proof back where it belongs: on the head contractor. This process is governed by a complex legal framework, involving the Queensland Building and Construction Commission (QBCC) and a web of legislation, but your first and best line of defence is always your contract.
Key Takeaways
Your Subcontract is Your Shield: The indemnity and insurance clauses in your subcontract are not just formalities; they are your primary legal defence against unsubstantiated back-charges and set-off.
Insurance is Your Armour: Public Liability and Professional Indemnity insurance are critical. Understand exactly what triggers a claim under your policies to counter a head contractor's allegations effectively.
Documentation is Your Ammunition: Meticulous records of work, communications, and site conditions are your best weapon. They provide the evidence needed to challenge a back-charge and set-off before it escalates.
Don't Fight Alone: Never accept a back-charge and set-off or admit liability without first consulting a specialist construction dispute lawyer who can analyse the contract and protect your rights.
What is a Back-Charge and Set-off, Really?
A back-charge and set-off is a common source of a construction dispute, where a head contractor seeks to recover costs by deducting them from the money owed to a subcontractor. This isn't just about defective work; it's a mechanism used to pass on expenses that the head contractor claims are the subcontractor's fault. Understanding the anatomy of these claims is the first step in building your defence.
The Anatomy of a Head Contractor's Claim
In the context of a construction project, a back-charge and set-off is a formal claim made by a head contractor to recoup costs they allege were incurred because of a subcontractor's actions or, just as often, their inactions. The reasons for these charges are varied but typically fall into several common categories. The most frequent is the cost of rectifying defective work that doesn't meet the standards outlined in the subcontractor contract. Another common trigger is damage to other parts of the project, such as a plumber accidentally damaging finished plasterboard. Head contractors may also issue back-charges and claim set-off for costs associated with site clean-up, the use of shared equipment, or delays allegedly caused by the subcontractor's failure to meet deadlines, which might be framed as a variation to contract.
Distinguishing Between Legitimate Costs and Unfair Penalties
Not all back-charges and set-off claims are valid, and it's crucial to distinguish between a legitimate cost and an unfair penalty. A legitimate charge is one where the head contractor can provide clear, documented evidence of a loss directly caused by your work. For example, if you installed a faulty window that leaked and damaged the flooring, a back-charge and set-off supported by an invoice from a flooring company to repair the damage is likely legitimate. The head contractor has a duty to mitigate their losses, meaning they must act reasonably to keep the costs from escalating.
Conversely, an unfair penalty is often arbitrary and lacks concrete evidence. This could be a round-figure sum for "project delays" without a detailed breakdown or a clear causal link to your specific actions. Or it could be an inflated charge for clean-up when multiple trades were working in the same area. The head contractor cannot simply invent a number; they must be able to prove the cost was actually incurred and that it was a direct result of your breach of the contract. This is where their obligation to act reasonably becomes a key part of your defence.
Why Your Subcontract is the Battlefield
Let's consider a brief story. Dave the Plasterer receives a vague back-charge and claimed set-off for $5,000 for "damage to flooring" on a Brisbane high-rise project. His immediate reaction is panic. He calls the site manager, who is dismissive and tells him the charge is non-negotiable. That night, instead of just worrying, Dave pulls out his subcontract. He doesn't just look at the scope of works; he reads the fine print. He finds a clause specifying that any claim for damages must be issued with photographic evidence and a third-party quote within 48 hours of discovery. The head contractor's email was sent a week after the alleged incident and contained no evidence. Dave's panic subsides, replaced by a sense of control. He now has a contractual basis to challenge the claim. His formal response doesn't argue about who did the damage; it simply points out that the head contractor failed to follow the agreed-upon procedure in the contract. This simple act shifts the entire burden of proof back onto the head contractor. The lesson is clear: the contract dictates the rules of engagement, and knowing those rules is your first and most powerful move.
Your First Line of Defence: The Indemnity Clause
When a head contractor issues a back-charge and set-off claim, they are essentially triggering the risk allocation mechanisms within your subcontractors contract. The most powerful of these is the indemnity clause. Far from being legal boilerplate, this clause is the core of your contractual defence. Understanding its function and, more importantly, its specific wording, can mean the difference between paying an unfair claim and defeating it outright. Effective risk management begins here.
Understanding What an Indemnity Clause Does
At its heart, an indemnity clause is a risk-transfer mechanism. It is a formal promise made by one party (the indemnitor, in this case, the subcontractor) to cover the losses, damages, or legal liabilities incurred by another party (the indemnitee, the head contractor) for specific, defined events. In construction, these clauses are designed to protect the head contractor from claims arising out of the subcontractor's work. For example, if your employee negligently causes a fire that damages the structure, the indemnity clause would typically require you to cover the head contractor's costs in defending any resulting lawsuits and paying for the repairs. It is a contractual tool to ensure that the party responsible for the work is also responsible for the consequences of that work.
"Proportionate Liability" vs. "Hold Harmless": Spotting the Dangerous Traps
Warning: The precise wording of an indemnity clause is absolutely critical and can expose your business to immense, often uninsured, risk. Not all indemnity clauses are created equal, and you must learn to spot the dangerous traps before you sign the contract.
Understanding Valid vs Invalid Indemnity Clauses
The validity and enforceability of indemnity clauses depends on several critical factors that every subcontractor must understand before signing.
Valid Indemnity Clauses:
A valid and reasonable indemnity clause should be:
Proportionate and Limited: The clause should only require you to indemnify for losses that are directly caused by your negligent acts, errors, or omissions. A valid clause might state: "The subcontractor shall indemnify the head contractor against claims arising from the subcontractor's negligent performance of the work."
Specific in Scope: It should clearly define what events trigger the indemnity (e.g., third-party personal injury, property damage) rather than using vague, all-encompassing language.
Compliant with Proportionate Liability Laws: In Queensland, proportionate liability legislation under the Civil Liability Act 2003 means that in many circumstances, your liability should be limited to your actual contribution to the loss, not the entire amount.
Invalid or Problematic Indemnity Clauses:
Certain indemnity clauses may be unenforceable or void under Australian law:
Unlimited/Broad Indemnities: Clauses requiring you to indemnify "for any and all losses howsoever arising" may be struck down as unfair contract terms under the Australian Consumer Law, particularly in small business contracts.
Indemnities for the Other Party's Negligence: Clauses that require you to indemnify the head contractor even for their own negligence or wrongdoing may be unenforceable, especially if not clearly and specifically drafted.
Indemnities Beyond Insurance Coverage: Clauses that create liability beyond what would normally exist at law may trigger "contractual liability" or "assumed liability" exclusions in your insurance policies, leaving you financially exposed.
The Insurance Coverage Trap: This is crucial: most Public Liability and Professional Indemnity insurance policies contain "contractual liability" or "assumed liability" exclusions. These exclusions mean that if you agree to an indemnity clause that makes you liable for something you wouldn't otherwise be legally responsible for, your insurance may not cover you.
For example, if you sign a broad indemnity clause that makes you liable for the head contractor's negligence, and a claim arises, your insurer may deny coverage because you "assumed" a liability that wouldn't have existed under general law. This leaves you personally liable for potentially massive costs.
The Unfair Contract Terms Risk: Under the Australian Consumer Law, indemnity clauses in small business contracts may be declared void if they:
Create a significant imbalance in the parties' rights and obligations
Are not reasonably necessary to protect legitimate business interests
Would cause detriment if enforced
Recent cases have seen broad, unlimited indemnity clauses struck down as unfair contract terms, making them completely unenforceable.
How a Well-Drafted Clause Can Immediately Shut Down a Claim
Imagine you receive that back-charge and set-off claim for alleged site damage. Your first move is to open the subcontract and find the indemnity clause. A well-drafted clause will be specific. It will define the precise scope of the indemnity, often limiting it to third-party property damage and personal injury directly caused by your negligent acts or omissions.
Your analysis should focus on a few key questions:
Does the head contractor's claim fall within the scope of the indemnity? If they are back-charging you for pure economic loss (like project delays) but the clause only covers physical property damage, you have an immediate defence.
Is there a causal link? The clause should require the loss to have "arisen out of" or been "caused by" your work. The head contractor must prove this link.
Is there a proportionality requirement? Does the clause limit your liability to your contribution to the loss?
Once you have analysed the clause, you can draft a formal response. This letter should not argue the facts of the incident. Instead, it should be a surgical legal argument. You can state, for example: "We refer you to clause 22.1 of the subcontract. The indemnity provided under this clause is limited to liability for personal injury and property damage. Your claim for alleged project delay costs is a claim for pure economic loss and therefore falls outside the scope of the indemnity we have provided. Accordingly, we reject your purported back-charge and set-off claim in its entirety." This response immediately puts the head contractor on the back foot, forcing them to justify their claim based on the agreed contract terms, not just their own assertions.
Mobilising Your Insurance Policies as a Defensive Shield
While the subcontract provides the legal rules of engagement, your insurance policies are the financial firepower you bring to the fight. A back-charge and set-off claim is essentially an allegation that you are liable for a loss, which is precisely the trigger for an insurance claim. Understanding which policy responds to which type of claim is fundamental to mobilising this shield effectively. For any subcontractor, having the right subcontractor insurance is non-negotiable, but knowing how to use it is what gives you power.
Public Liability Insurance: Your Shield Against Property Damage & Injury Claims
Public liability insurance is the workhorse of a subcontractor's defensive arsenal. It is designed to respond to claims from third parties (like the head contractor or another trade) for personal injury or property damage that occurs as a result of your business activities. When a head contractor back-charges and claims set-off for the cost of repairing a wall your forklift damaged, this is a classic public liability scenario.
However, it is absolutely critical to understand what this policy is not for. Public liability insurance does not cover the cost of rectifying your own faulty workmanship. If you install a plumbing fixture incorrectly and it needs to be re-installed, that cost is yours to bear. But if that faulty fixture leaks and damages the client's new carpet, the cost of replacing the carpet is the type of "consequential" property damage that your public liability policy is designed to cover. This distinction is the source of many disputes, and being clear on it allows you to immediately assess whether a back-charge and set-off claim is an issue for your business or one you can pass on to your insurer.
Professional Indemnity Insurance: Defending Your Advice and Design
For many modern subcontractors, the work isn't just about physical installation; it involves design, certification, or professional advice. Electricians who advise on load calculations, hydraulic consultants who design drainage systems, or fire services contractors who certify an installation are all taking on a professional duty. This is where professional indemnity insurance comes into play.
Unlike public liability, which is triggered by physical damage or injury, a professional indemnity (PI) policy is triggered by a claim of financial loss resulting from a breach of your professional duty. For example, if you are an HVAC contractor and you design a system that is undersized for the building, the head contractor might back-charge and claim set-off for the cost of the upgrade and the associated project delays. This is not a claim for property damage; it's a claim for pure economic loss stemming from your professional advice. Having PI insurance is crucial for these roles, and it's a key piece of cover for anyone involved in insurance for project managers or design-and-construct roles.
Understanding Workers' Compensation and Its Limits
Every employer in Queensland is required by law to have a workers' compensation policy. This is a statutory, no-fault scheme governed by the Workers' Compensation and Rehabilitation Act 2003 that covers the costs associated with your own employees being injured at work. While it is a vital part of your insurance program, its role in defending back-charges and set-off claims is limited. It protects you from lawsuits by your injured workers, but it provides no defence against a claim from a head contractor for project-wide damages, delays, or rectification costs arising from that worker's actions. It's a shield for your team, not a sword against contractual claims.
Contract Works Insurance: Who Really Carries the Risk?
Subcontractors must verify who is responsible for Contract Works insurance, often called "All Risk" insurance. This is the broad policy that covers loss or damage to the project itself during construction (e.g., from fire, storm, theft, or vandalism). Typically, this policy is arranged by the principal or the head contractor for the benefit of all parties working on the site, including subcontractors.
However, the critical mistake is assuming this means you are fully protected. The subcontract is where the risk is truly allocated. Many head contractor agreements contain clauses that, while you may be covered under their policy, make you responsible for paying the policy's excess if a claim arises from your work. This excess can be tens of thousands of dollars. Therefore, it is essential to not only confirm that a Contract Works policy is in place but to request a copy of the Certificate of Currency. This allows you to see the value of the excess and understand the potential liability you are accepting under the contract.
The Subcontractor's Playbook: A Step-by-Step Response to Back-Charge and Set-off Threats
Receiving a back-charge and set-off claim can feel like a direct assault on your cash flow and reputation. A reactive, emotional response is exactly what the head contractor expects. Instead, a calm, methodical, and contract-based approach will demonstrate your professionalism and immediately put you in a stronger position. This playbook outlines the precise steps to take to dismantle an unfair claim and protect your right to security for payment.
Step 1: Immediately Review the Subcontract's Notice Provisions
The moment a back-charge and set-off claim lands in your inbox, resist the powerful urge to pick up the phone and argue. Your first, most critical action is to open the subcontract. Your goal is to locate and meticulously analyse the clauses that govern notices of delay, defects, or claims. Head contractor agreements are almost always drafted to impose strict notification requirements on the subcontractor, but these obligations are a two-way street. Check the contract for specific requirements the head contractor must meet. Did they have to notify you of the alleged defect within 24 hours of discovery? Was the notice required to be in a specific written form? Did they fail to give you a reasonable opportunity to rectify the issue yourself before engaging others? A head contractor's failure to comply with their own contractual obligations for notifying you is often your simplest and most powerful initial defence.
Step 2: Formally Request Full Particulars and Evidence
Your next step is to draft a formal, written response. This communication is crucial and must be carefully worded. It should not, under any circumstances, admit any fault or liability. The primary purpose of this letter is to formally request that the head contractor provide full particulars and all supporting evidence for their alleged loss. This isn't just a request; it's a strategic move that legally places the onus of proof squarely back on them.
Your letter should request specific items, including:
Dated photographs of the alleged damage or defect.
Reports from any consultants or inspectors.
Invoices and receipts for all costs incurred.
Evidence that the costs incurred were reasonable and at market rates.
Daily site diaries or records showing which parties were working in the area at the time of the incident.
By demanding this level of detail, you are challenging them to substantiate their claim. Often, you will find the evidence is weak, non-existent, or fails to directly link the loss to your work, significantly weakening their position in any dispute in construction.
Step 3: Notify Your Insurer (Without Admitting Liability)
As soon as you receive a written threat or claim, you must notify your insurance broker or insurer. This is a requirement under most policies, and failing to do so in a timely manner can give your insurer grounds to deny a claim later. However, how you frame this notification is critical. You should provide a factual account of the situation, forwarding the head contractor's allegations and your formal request for particulars.
This brings us to the golden rule: you must not admit liability to the head contractor or any other party. Admitting fault, even verbally in a heated phone call, can be seen by your insurer as prejudicing their position and may give them the right to refuse to cover you. Your communication with the head contractor should always be non-committal regarding fault, while your notification to your insurer should be a transparent reporting of a potential claim made against you.
Step 4: Issue a Formal Rejection Citing Your Contractual Defences
Once you have reviewed the contract and the (often inadequate) evidence provided by the head contractor, you can compose a formal rejection letter. This is where you bring together your contractual defences. The letter should be a clear, logical argument that references specific clauses from your subcontract. For example, you might cite their failure to adhere to the notice provisions, the fact that the claim falls outside the scope of your indemnity clause, or a limitation of liability clause.
This letter serves as a powerful record of your position. It can also be used to show you are acting reasonably. You can conclude the letter with a "without prejudice" offer to meet and discuss a commercial resolution. This signals that while you formally reject their legal claim, you are open to a practical discussion to keep the project moving. This can be a highly effective strategy to resolve the issue without resorting to more drastic measures like terminating a contractor relationship or escalating to formal legal proceedings. It protects your position while keeping commercial options open.
When the Head Contractor Escalates to the QBCC
If your contractual defence is solid, a head contractor may look for other avenues to apply pressure. One common tactic is to escalate the matter to the Queensland Building and Construction Commission. They might lodge a QBCC complaint alleging defective work, hoping the regulator will issue a direction that validates their back-charge and set-off claim. Understanding the QBCC's role, its powers, and its limitations is crucial to navigating this phase of the dispute.
Can a Head Contractor Use the QBCC Against You?
Yes, a head contractor can lodge a complaint against a subcontractor with the QBCC. These complaints are typically centred on allegations of defective or incomplete work that does not meet the required standards under the QBCC Act or the National Construction Code. The head contractor's goal is often to obtain a Direction to Rectify from the QBCC. They believe that if the regulator officially deems your work defective, it strengthens their position to withhold payment and legitimises their back-charge and set-off claim. The QBCC's primary function, as outlined in the Queensland Building and Construction Commission Act 1991, is to regulate the industry and uphold building standards, so they take these complaints seriously.
The QBCC's Powers and Limitations in Subcontract Disputes
While the QBCC's power to investigate defective work is significant, its role in complex contractual disputes is often misunderstood. The QBCC can inspect the work, and if it is found to be below standard, they can issue a Direction to Rectify. Failure to comply can lead to fines, demerit points, and even licence suspension. However, the QBCC's jurisdiction over payment disputes is limited.
A key argument to make is that the QBCC is not the appropriate forum to decide complex contractual arguments about indemnity, liability, and the validity of back-charges and set-off claims. These are matters of contract law, not building standards. While they can direct you to fix a proven defect, they generally cannot rule on whether a head contractor is entitled to withhold a specific monetary amount as a back-charge. These issues often fall outside their direct scope and are better suited for resolution through other legal avenues like adjudication under the BIF Act or a hearing at the Queensland Civil and Administrative Tribunal (QCAT). The QBCC handled 6,115 building disputes in 2023-24, but a significant portion of purely contractual payment issues require a different legal path.
Leveraging the BIF Act for Your Own Protection
When a head contractor is withholding payment and using a back-charge and set-off as the reason, you are not without your own weapons. The Building Industry Fairness (Security of Payment) Act 2017 (BIF Act) is your sword. This legislation provides a rapid adjudication process designed specifically to resolve payment disputes and keep cash flowing in the construction industry.
Instead of getting bogged down in a defensive argument with the QBCC, you can go on the offensive. The process involves issuing a formal payment claim under the Act for the money you are owed. The head contractor is then legally required to respond within a strict timeframe with a "payment schedule." In this schedule, they must either agree to pay the full amount or detail every single reason for withholding payment, including the legal basis for their back-charge and a valuation of it. If they fail to pay or if their reasons are weak, you can immediately file for adjudication. An adjudicator will make a fast, binding decision on the payment dispute, often within weeks. This is one of the most powerful tools you have to enforce Your payment rights under the BIF Act. It forces the issue out of the realm of threats and into a formal legal process where the head contractor must justify their actions.
Why Professional Legal Advice is Your Ultimate Weapon
Navigating the complexities of a construction legal dispute, from interpreting a subcontractors contract to facing a QCAT application, requires specialised knowledge. While the playbook above provides a strong defensive framework, the ultimate weapon in your arsenal is the guidance of an experienced construction lawyer. Engaging an expert like John Merlo lawyer is not a sign of weakness; it is a strategic decision to protect your business and your bottom line.
The Cost of Inaction vs. The Investment in Expert Counsel
Ignoring a back-charge and set-off claim is the single most expensive mistake a subcontractor can make. Silence can be legally interpreted as acceptance, allowing a small disputed sum to become an established debt. What starts as a $5,000 back-charge can quickly escalate with the head contractor adding their own administrative and legal costs. The cost of inaction is not just the initial amount; it's the precedent it sets and the future disputes it invites.
Framing legal advice as a "cost" is a miscalculation. It is a strategic investment in risk mitigation. A few hours of a lawyer's time to review a contract and draft a powerful, legally sound response can save you tens of thousands of dollars in the long run. A building and construction law expert provides immense value by preventing the dispute from escalating, preserving your commercial relationships, and ensuring you don't concede on rights you didn't even know you had.
How a Lawyer Uses Your Insurance to Negotiate from a Position of Strength
An experienced construction lawyer plays a critical role as the intermediary between you and your insurer. They know exactly how to frame a claim notification to maximise the chances of your policy responding, ensuring the correct information is provided without any prejudicial admissions of liability.
Armed with the backing of your insurer, the lawyer can then negotiate with the head contractor from a position of immense strength. They can dissect the head contractor's claim, highlight its legal and contractual weaknesses, and use the strength of your insurance position as leverage. This often leads to a favourable negotiated settlement—perhaps a small, commercial payment to make the problem go away—without ever needing to step foot in a courtroom. This strategic negotiation saves time, money, and the stress of prolonged litigation.
Preparing for QCAT: When a Dispute Goes Formal
If a dispute cannot be resolved through negotiation, it may proceed to a formal hearing at the Queensland Civil and Administrative Tribunal. Our guide to QCAT in Queensland provides a detailed overview of this process. When a dispute reaches this stage, self-representation is a significant risk. QCAT requires specific types of evidence, adherence to strict procedural rules, and well-formed legal arguments.
A lawyer's role here is indispensable. They will prepare your entire case, from gathering and organising evidence (like site diaries, photos, and expert reports) to drafting formal submissions and witness statements. They will represent you at the hearing, cross-examine the head contractor's witnesses, and make legal arguments on your behalf. The statistics show the importance of a well-prepared case: during Q3 of 2023-24, only [VOLATILE DATA: 3] QBCC-related decisions were set aside by QCAT, demonstrating that the tribunal's initial decisions are generally robust. Having an expert prepare and present your case gives you the best possible chance of a successful outcome.
Conclusion
For subcontractors in Queensland, back-charges and set-off claims are not an unavoidable cost of doing business; they are a challenge that can be met and defeated with the right strategy. You are not powerless. Your shield is the subcontract you signed, your ammunition is your insurance portfolio, and your armour is meticulous documentation. By understanding the intricate dance between contractual clauses, insurance policy triggers, and the legislative powers of bodies like the QBCC, you can move from a position of defence to one of control.
The playbook is clear: act deliberately, not emotionally. Review your contract, demand evidence, notify your insurer correctly, and reject unsubstantiated claims with formal, legally-grounded arguments. The goal is to be prepared, not paranoid. By adopting this proactive and informed approach, you can protect your cash flow, defend your reputation, and ensure you are paid fairly for the work you perform. Before a minor threat escalates into a costly and draining reality, empower yourself by seeking expert help from a specialist construction dispute lawyer who can fortify your shield and sharpen your sword.
FAQs
Can a head contractor back-charge and claim set-off for something that isn't my fault?
They can try, but it is not legally enforceable without proof. The burden of proof is on the head contractor to demonstrate that your specific actions or negligence directly caused the loss they are claiming. A well-drafted subcontract will require them to provide evidence linking your work to the damage. Without this causal link, the back-charge and set-off claim is unsubstantiated and can be successfully challenged.
What is the first thing I should do when I receive a verbal threat of a back-charge and set-off?
Do not engage in a verbal argument or admit any fault. Your first step should be to politely request that the head contractor put their claim in writing, detailing the specific issue, the alleged costs, and the contractual basis for the charge. This moves the dispute from an informal threat to a formal process where you can apply the defensive playbook outlined in this article.
My Public Liability insurance has a high excess. Is it still worth making a claim?
Yes, you should still notify your insurer. Even if the back-charge and set-off amount is less than your excess, notifying them is a requirement of your policy. Furthermore, your insurer may provide valuable assistance in defending the claim (sometimes called a "claims handling" service), as it is in their interest to prevent a small claim from escalating into a larger one that exceeds your excess.
The head contractor is threatening to kick me off-site if I don't accept the back-charge and set-off. What are my rights?
This could be considered a breach of contract or an act of intimidation. A head contractor cannot lawfully terminate your contract or remove you from a site without following the specific termination procedures outlined in the subcontract. Such a threat is a serious escalation, and you should immediately seek advice from a specialist construction dispute lawyer. You may have rights under the BIF Act to suspend works for non-payment, which can be a powerful counter-move.
How can I protect myself from unfair back-charges and set-off before I even sign a contract?
The best defence is a good offence. Before signing any subcontract, have it reviewed by a construction lawyer. They can identify high-risk clauses like broad "hold harmless" indemnities and negotiate fairer terms, such as proportionate liability, strict notice periods for the head contractor, and a clear process for valuing and evidencing any potential claims. This proactive step is the single most effective way to prevent future disputes.
This guide is for informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please contact Merlo Law.
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