There are therefore clear benefits for contractors in the implementation of return agreements. However, in practice, it can be difficult to conclude back-to-back agreements. There are, in broad and broad terms, structuring bipartisan ways to structure subcontracting: the main point is that the consideration of contractual terms in another contract must be prudent and that the context and relationship between the parties must also be taken into account for the contract to be practical. Although it is longer and potentially more costly, it is important that the development of a complete subcontracting, taking into account the various provisions of the main contract to be included in the subcontract, be ensured that the contract is easy to interpret and that the distribution of risks between the parties is clear. Depending on the sector, there may be legislation that determines what can or cannot be included in a “return to competition” contract, that .B. in the construction industry. B, for example, in the construction sector, the Housing Grants, Construction and Regeneration Act 1996 stipulates that a provision that subordinates payment under a construction contract to payment to the payer is inoperative (unless there is, that third party or any other person whose payment is (directly or indirectly) a condition of payment from that third party is insolvent). Under English law, a “back-to-back” contract containing terms by reference cannot contain certain types of clauses from the main contract to the sub-contract. For these clauses, you may need to use a language in the sub-contract that expresses the desired terms in the main contract, rather than relying on a default use of the framework by the reference clause. Other local and international laws may also prohibit the introduction of certain provisions. These problems should be resolved by the proper development of self-sustaining subcontracting. Another obvious advantage of individual contracts is that, in the execution of the subcontracting, the parties should refer to only one subcontracting, instead of referring to the main contract, which itself can cause confusion.
However, the development of individual contracts should not be seen as a simpler task; again, you have to be very diligent. As contractors increasingly outsource much of their work to others, the supply chain has become longer and more complex. It is important that all parties ensure that certain rights and obligations exist not only in their own agreements, but also in agreements reached by the parties with other parties. This ensures that the principal contractor is not responsible for all obligations to the employer, that subcontractors have enforceable rights, and that dates are coordinated throughout the supply chain. Back-to-back construction contracts are quite common, especially for large projects. Large international projects usually require the participation of many participants. Each of these participants has a different ability to contribute to different aspects of the project. In general, “back-to-back” means that each document contains all the conditions and features like the next contract. You can open a back-to-back letter of credit containing all the same items as the previous one. In residential construction, the term could refer to houses built side by side.
One of the common features of back-to-back contracts is that payment to the subcontractor is conditional on the principal contractor`s acquisition of the payment under the main contract.