These two clauses are in the Terms and Conditions of a Sub-contract.The Subbie was working on a building site and overnight some of the materials he bought in to use on the job, (along with a whole load of other contractors things) were stolen costing him about 3k because the Main Contractor says he was responsible for his own materials in the contract.

Can anyone read these two clauses who might be more familiar than I with this terminology and tell me whether they think the Contractor or the Sub-Contractor owns the materials and who should pay for them being stolen? Thanks.

14a) The risk in all goods and materials to be incorporated in the sub-contract works and in all plant, tools and equipment for use in connection with sub-contract works, including but not limited to third parties and employees and damage and loss howsoever caused, shall remain with the subcontractor which shall at its own cost maintain insurance of its goods and materials until Practical Completion of the Main Contract Works.

14b) Notwithstanding clause 14(a) hereof, all goods, materials and temporary works shall become the property of the Contractor as and when the goods, materials and temporary works or any part thereof are first identified, inspected and appropriated by the Contractor for the Sub-Contract Works and in any event upon delivery to the site and whether payment therefore has at that time been made by the Contractor in whole or in part or not at all.

Plain English eh??!?!

Section 1 states that all goods that are the property of the subcontractor are left there at the subcontractors peril. i.e. he needs to insure them himself.

The second part states that any goods the subcontractor pays for to do the work immediately become the possession of the contractor when they come in the premises, whether he has paid for them or not.

The second part is in case there is a payment dispute, i.e. the subcontractor cannot demolish the building to get the bricks back (as the contractor has not paid for the bricks)

Craig, love the red dot ! Hope you weren't too bad or I'll get clobbered for condoning you!

The second part to me contradicts the first and as I read it, it sounds like the goods become the property of the Contractor " as and when the goods, materials and temporary works or any part thereof are first identified ( seen on site) Inspected (checked) and appropriated (said where they are going) by the Contractor ie: checked in, and in any event upon delivery to the site....

That's the way I read it anyway. Therefore making the goods the property of the Contractor when they are delivered on-site.

Yeah, I think it needs to be interpretated that the goods for the purpose of making the building, etc. are automatically owned by the contractor when they come on site and are checked and appropriated.

However, the clauses state that although the contractor as a contractual interest in the goods, the onus is on the subcontractor to insure them.

however, these clauses could be irrelevant if the contractor was negligent in the security of the building. ie. e was told to leave the goods on the building site, as there is a security guard, and there was none, etc.

Yeah, I think it needs to be interpretated that the goods for the purpose of making the building, etc. are automatically owned by the contractor when they come on site and are checked and appropriated.

 

However, the clauses state that although the contractor as a contractual interest in the goods, the onus is on the subcontractor to insure them.

 

however, these clauses could be irrelevant if the contractor was negligent in the security of the building. ie. e was told to leave the goods on the building site, as there is a security guard, and there was none, etc.

"However, the clauses state that although the contractor as a contractual interest in the goods, the onus is on the subcontractor to insure them."

Can you insure something that doesn't belong to you?

"however, these clauses could be irrelevant if the contractor was negligent in the security of the building. ie. e was told to leave the goods on the building site, as there is a security guard, and there was none, etc."

The security of the site was the responsibility of the Contractor and apparently there was a security guard - now quite where he was looking whilst the stuff was being loaded onto the getaway lorry god only knows. So how do we tackle that ?

My te pence worth

First of all for one to insure something there needs to be a insurable interest for that particular item.

If what we are talking about is equipment that a subbie is provided with, for completing a task then I would say he has an interest in that item, and if required he should be able to insure that. The key word is insurable interest. Secondly in my opinion if the contractor is expecting the subbie to insure items that will deminish in value as they get used i.e. as he starts laying the bricks the value of the stock will start diminishing and the insurance risk will pass from the subbie to that of building owner, then that is slightly different.

Hope you get the jist.

These were Tiles ( Floor and Wall )and the fixing materials not tools, a whole pallet of quality tiles. The subbie had ordered them and had them delivered on site and was to use them on the contract - but they vanished overnight and the contractor is saying the subbie should suffer the loss.

Personally, with the terminology of the wording, then the contractor is right. However, As a long shot I would contract the security company to see if the security guard was there, was this the only site he patrolled, or if he was a man in a van, were the contractors aware, and paid for this?

Regarding the insurable interest, the subcontractor has contractual interest in the goods, so yes insurable interest is there.

Thanks Craig & Dhoom I'll check it out.

Sub contractor is liable .It was his duty to look after them ..

You can get theft cover if you organise it ....But it is a hassle .... looked at it recently as I was going to build a couple of houses

written with 30 years of contracting experience

Thank you stivis, much appreciated. Sounds like license for the crooks to me!