General contractors and subcontractors are ... Basic concepts of the construction contract

When implementing an investment project (for example, in construction), the roles and responsibilities of all participants in the process are, as a rule, clearly delimited. Their functions, performed consistently, mutually complement each other. The need for such separation has been reconciled and confirmed by decades of construction activity.

The main persons of the project

The two leading positions of participants in the construction process are the investor and the developer. They determine the overall goal of the project, they select a suitable customer, which is the central link. He, in turn, already chooses the following participants - the designer and the contractor. The designer develops general architectural and volume-planning ideas of the customer and coordinates them with all interested parties. The contractor or general contractor implements this plan. And to ensure the construction of all the necessary materials and equipment - the task of suppliers. This is how the traditional scheme of interaction of all participants in the construction process looks like, each of which is an independent legal entity.

Who controls the process?

Thus, the main actors are the customer and the general contractor - they organize and control the construction in general. In our time, often there are no clearly defined boundaries between the participants in the process. It is often possible to observe the combination of the functions of the investor and the developer, the customer and the general contractor. But with the traditional organization of construction, as a rule, the functions of direct production are borne by the contractor or general contractor. At the same time, it is more economical for the contractor to assign part or all of the fulfillment of the duties to perform the scope of work for third parties. In this case, such persons are called subcontractors. About them - further.

Who are such subcontractors? The subcontract is an independent contract, derived from the main contract (contract). It must comply with civil law. The law does not provide for any specifics in the order of its conclusion. The subcontract is formalized in the same manner as the main contract. It can be concluded by exchanging an offer and an acceptance, or maybe by the results of a contract auction. In our time, often there is a tripartite agreement between the customer, as well as a general contractor and a subcontractor.

Subcontractor in the contractor's contract

If the contract does not provide for personal fulfillment by the contractor of its obligations, the latter has the right to recruit subcontractors. Thus, a subcontractor in a contractor's contract is an employee (a legal entity) who has committed (partially or completely) the production of certain jobs. There may be several such organizations, their number is not limited by legislation. Subcontractors are legally independent organizations that specialize in specific types of work. For example, construction and installation, finishing, etc.

It is quite possible that subcontractors are building organizations that take on the whole complex of works on erecting a construction object. That is, the work can be performed by a subcontractor "from" and "to" with a direct "turnkey" delivery to the general contractor. At the same time, the customer may not even know who exactly performs the final work on the project.

Interaction of the parties

The so-called list of agreed subcontractors is quite popular these days. When using it as part of a contract agreement, the customer is relieved of the need to enter into contractual relations directly with the performers. Contractors and subcontractors are in this case the subjects regulating relations among themselves independently. If the contract is concluded based on the results of trades, the list of prospective subcontractors is included in the bidder's tender offer. The general contractor and the subcontractor are two closely connected links of the construction process, therefore such a list can have a significant impact on the final decision of the customer.

In the process of production, it may be necessary to replace one of the subcontractors or a redistribution of the volumes and types of work between them. Since subcontractors are legal entities that have concluded the contract directly with the contractor, the written consent of the customer is required to implement such changes. Often, a customer who is dissatisfied with the conduct of work tries to enter into negotiations with a subcontractor independently, which is legally incompetent - he is not a party to the contract.

Let's sum up the results

Subcontractors are the persons on whom the quality of work and the term of performance of the contract directly depend. Therefore, many customers include in the text of the general contract agreement an item on the timely payment of contractual remuneration by the general contractor. The customer himself has the right to conduct cash settlements with subcontractors, but only if such an option is provided for by the general contract agreement, or with the consent of the general contractor an agreement has been concluded between them for the production of certain types of work.