Streamline Pipeline Bid Management in Legal Agreements

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you are dealing with subcontractors on daily basis in the project because the majority of the project packages are subcontract packages and that's why it is very important to understand the subcontract agreement which defines the relationship between the main contractor and the subcontractor so in this video I'm going to be breaking down the subcontract agreement and what are the 11 very important close headings that you can find in any subcontract agreement and we're starting right now so first of all what is a subcontract agreement this is an agreement between a main contractor with a subcontractor to execute part of the works and if you don't know the difference between the main contractor and the subcontractor I have made a complete video comparing these two to each other and you can find the link to that video in the description down below but for the time being let's assume that we know who is the main contractor and who is the subcontractor the subcontract agreement will start with definitions we need to Define everything in the a contract so when we say a main contractor what do we mean by a main contractor and when we say a subcontractor who is the subcontractor when we say the works what are the works which works are we talking about when we say the consultant when we say the client all these terminologies should be defined in the first page of the contract so that anyone reading the contract when he sees any of these names he can understand what exactly are we talking about and everything will be very well understood after that you will have something that is called the Preamble and the Preamble is just like a narrative a narrative like what like a story like for example a main contractor had a project with so and so client and because of that this main contractor want to subcontract part of the works which is this one to this so and so company so it's a narrative that tells you who is the main contractor who is the subcontractor what are the works that we are talking about and these works are coming for which project and this project belongs to which client things like this after that you will have what we call the close headings and these close headings will be starting with the first sub close which is General conditions and under the general conditions you can have things like components of the subcontract agreement and the contract price and the contract type as well and the taxes how do we deal with the taxes and the acceptance of work how The Works will be handed over and how they will be accepted because the works that will be made under a subcontract agreement these Works will be executed by a subcontractor so for example the main contractor need to accept these works and the project consultant also need to accept these works and the client of the project need also to accept these works so acceptance will come under the general conditions and it should be there in the contract the close heading number two is the scope of work and under this close we can say that the scope of work consists of what for example specifications and the drawings and the boq and all these things will Define the scope and we can also have something that is called an extra an extra a or an extra one for example that defines the scope of work and we can have this anixture attached to the contract in the end and we can detail the scope of work everything that is required by this subcontractor to be made in the project we can have all of this listed under the annexure but under the close heading in the contract itself we can say that there will be one Annex church that is called an extra a and this is the scope of work and all the details are there in this anixture so this one will Define the scope very well close heading number three will be the subcontract documents and actually we talked about the drawings and the voq and the specifications and all and the close heading number two which is the scope of four but in close heading number three which is the contract documents there we can Define the priority of the documents and which document has a higher priority than another document and all of this can come under the subcontract documents we can say that the documents are the specifications the drawings the voq the conditions of contract and this will be the priority and all of this will be there close heading number four commencement time for completion And Delay damages and under this close we can Define these things what do we mean by a commencement date and when the works will commence and what is the duration or what is the time for completion and what if the subcontractor didn't hand over the works in the time so what will be the delay penalties and all of this close heading number five is the variations and under this close heading we can have some articles that talks about how a variation can happen and when the subcontractor can proceed with the variation he needs for example to receive direct instructions written from the main contractor to do this additional work or to change something in the contract so this is how we'll be dealing with the variations or how we will accept this variation and also the variations should be justifiable and the subcontractor in case of variation and has to submit all the documents that substantiates the new pricing and all of this and also you can have something that says that all the prices in the contract will remain fixed until the end of the duration or until the completion of the works and you can have also an article talks about the rates that they should be fixed throughout the project duration and they cannot change and changing the rate is not considered a variation so such thing can come under this close heading close heading number six payments and bonds and here you can have or you can Define how the money will be paid what are the terms of payment and what are the bonds required for example Advance payment security and the performance bonds and these things can come under the payments and bonds close heading number seven subcontractor resources insurance and the indemnity and under this up close you can Define things that are related to the workmanship Insurance of the subcontractor and how he will be ensuring his works and how he is responsible for any damages or anything that happens in his works so these things can come under this sub Clause then subclose number eight which is health and safety and this subclose will Define how to deal with the health and safety in the project and what is the responsibility of the main contractor and the subcontractor in terms of safety of the work environment and such things close heading number nine which is determination and actually this is one of the very important close headings in any agreement because it states how termination can happen in case of for example default of subcontractor then the main contractor can terminate this contract and kick this subcontractor out and there is something called termination at convenience which means that the main contractor at any point and without any reason can terminate the subcontractor from the work and in such case what is the entitlement of the subcontractor for payment can he for example claim for loss of profit or no only he can claim for the works that he executed with it so these things will come under the determination close heading close heading number 10 will be the warranty and this simply displays how the subcontractor will be giving a warranty or a guarantee for the works that he has executed and what is the time duration for this warranty and what is the type of the warranty and all of that close heading number 11 will be the governing law and the dispute resolution mechanism and this is very important because you will be defining under which low this agreement is being executed and in case of dispute what are the mechanisms to be done do we sit do we mediate do we go for arbitration do we go for the court so things like that can come under the governing law and dispute resolution close heading in the subcontract agreement after this you will have the annexures that we talked about for example an extra a can be the scope of work then you can have an extra B which is the voq then you can have a mixture C which is the program of work D for example specifications if be the drawings and one for the responsibility metrics who will provide the electricity will provide the scaffolding and these annexures will be referred to and the close headings that we talked about wherever necessary in any close heading if they need to refer to one of the nxtures it will be there refer to so you can read all these close headings and the Articles under the close headings in ance with the annexures that you have attached in the contract itself so everything the conditions of contract and the annexures and all these documents all of that they will make the subcontract agreement and by the way the concept that we explained here it is not only for the subcontract agreement it's for any agreement and this is the video that I told you about where I compare the main contractor to a subcontractor thank you so much for watching and I hope you enjoyed this video and if you did don't forget to like it and subscribe to the channel and join also the channel memberships and I'll see you in the next