Can Clients insist on Contractor’s using NEC Contracts in their supply change?
I often read about the benefits of the Contractor utilising back-to-back NEC Contracts with their supply chain, whether sub-contractors, suppliers or professional services, but have never seen this requested as a contractual requirement…
Does anyone know of significant pitfalls in making back-to-back contracts a contractual requirement in the main contract?
Would I be correct in assuming that his would be done as a Z-clause?
For me no significant downsides as, as a Contractor, I would want to be as back to back as possible. Having said this, I think the biggest legal risk is often ignored by lawyers (believe it or not) and that is the risk (almost certainty) of not operating the contract as written leading to breaches of contract.
So while lawyers might want an full ECS as it is back-to-back legal with the ECC, the reality is that for a small subcontract, neither the Contractor or Subcontractor will operate it as written, so both will be in breach at some point. And if both a re consistently in breach, then it can lead to a big ball of spaghetti to unwind. So for smaller subcontracts, I suggest using the short form.
Just to add/compliment to Jon’s answer - it is legally very difficult/not possible to impose a form of contract, however you can “strongly encourage”. If anything other than an NEC contract is proposed it has to be accepted by the Project Manager, so if I was a Contractor that would be one less acceptance I can avoid by using NEC down the line as well.
As a Contractor I can not think why I would not want to be anything other than back to back.