You are here:

Construction Law/Back to Back Subcontract

Advertisement


Question
Dear sir;

I need a definition for the term " Full back to back basis", this term was used on a Subcontract Agreement.

Thank you

Haya

Answer
Dear Haya,

Back to back contracts are almost as dangerous as a Letter of Intent.  It is safer to walk through a live minefield than sign a back to back contract.  I hope that you had sight of the main contract before you signed your subcontract and asked 1001 questions about the meaning and application of back to back.  Even main contractors do not understand what is meant by 'back to back'.  They are just lazy and hope that it transfers all obligations to the subcontractors, without realising their exposure.  

A couple of websites that might help you understand the concept and the perils:-
http://www.deaconslaw.com/eng/knowledge/knowledge_439.htm
http://www.theconstructionindex.co.uk/news/view/rights-and-obligations-under-bac

There are other sites if you google 'back to back construction contracts'.  Never walk through an open door unless you have some idea of what is on the other side.  Best advice is to finish the contract on time, whatever the cost, and be more careful next time.

Construction Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


Peter M. Elliott

Expertise

First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol www.eotprotocol.com before submitting a question.

Experience

Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Organizations
Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

Education/Credentials
B Sc(Hons) in Civil Engineering

©2016 About.com. All rights reserved.