3. “…WITHOUT THE WRITTEN CONSENT OF THE EMPLOYER”. Note that in these two cases (N. 1 and 2) it is the written consent of the employer and not merely of the engineer which is necessary. The employer’s right to refuse consent is absolute and the contractor has no right to challenge it either in the courts or in arbitration. As to waiver of written consent see cl. 47, N. 11.
4. “THE CONTRACTOR SHALL NOT SUB-LET THE WHOLE OF THE WORKS… THE CONTRACTOR SHALL NOT SUB-LET ANY PART OF THE WORKS WITHOUT THE WRITTEN CONSENT OF THE ENGINEER”. The position in the absence of a special term in the contract is that although he may not assign his liability so as to rid himself of it (see N. 1) a party ordinarily may sub-let the contract work, that is, have it carried out physically by someone else but remaining himself solely liable to the other party to the contract for the result. As the rest of this clause sets out, sub-letting and not assignment of liability is the basis of the sub-contracting system; the main contractor remains solely liable to the employer for the quality of all the work but, with consent where necessary, employs others to carry out parts or to supply material.
This clause requires consent to sub-letting and the main contractor will not be entitled to payment for work sub-let without consent, even though the sub-contractor’s work is satisfactory. The employer has contracted to pay only for physical performance of the contract by the original contractor; if he does not get that it is not for him to prove in what way the work might have been better if he had. The analogy is with the case of an author employed to write a book, who is obviously not entitled to payment if without consent he has someone else write it for him, however good the result. The fact that the employer may necessarily keep the benefit of the work by the sub-contractor does not affect the legal position—see case pp. 266–7.
By cl. 63 (1) (e) the employer has a right of forfeiture in some cases of wrongful sub-letting. Where he does not wish to forfeit the whole contract, and it may be that because the contractor knows this the threat to do so has no effect, it should be enough to discourage sub-contracting if it is pointed out that neither the main contractor nor the sub-contractor (p. 223) will be entitled to recover payment for the sub-contractor’s work.
It is clear on general principles that the written consent of the engineer must be given before a sub-letting is made, so that the arbitrator cannot validate a sub-letting made by the contractor without asking for consent—see p. 302, N. 13. If the contractor does ask for consent, an arbitrator may under cl. 66 “review and revise…(the Engineer’s) decision” to refuse consent. However, that remedy is not effective for the contractor. He is not entitled to arbitration before completion of the works unless the engineer refuses to certify for some payment because of the sub-letting (cl. 66(2)), and (as this clause does not require the engineer’s consent to be reasonable) the arbitrator does not appear to have power eventually to award damages to the contractor, even if loss can be proved (p. 417).
In the absence of regulation in the construction contract, sub-contracting by the contractor without the employer’s consent still in many cases will be a breach of contract. It will be a breach so far as the circumstances show that the exercise by the original contractor of his particular skill or judgment in relation to the construction of the works was to the employer a material consideration in entering into the contract with him.
The contractor will, of course, use employees, but there is a real difference between that and sub-letting. The contractor has full practical and legal powers to organise and control the work of his employees, but in the absence of special agreement only very limited control over independent sub-contractors. The problems which the engineer should therefore consider before agreeing to a sub-contract are dealt with on pp. 222–3.
For the engineer’s power to order a sub-contractor or sub-contractor’s employee to be removed from the works see p. 85, N. 6.
5. THE ENGINEER’S AUTHORITY TO CONSENT TO A SUB-CONTRACT. The engineer has by this clause apparent authority to consent to a sub-contract, so that his consent is generally effective so far as the contractor is concerned even if the employer did not authorise it, but the engineer may be liable to the employer—p. 399.
6. “CONTRACTOR…RESPONSIBLE FOR…ANY SUB-CONTRACTOR”. See p.221.
7. “PROVISION OF LABOUR ON A PIECE-WORK BASIS…NOT…SUB-LETTING”. Apparently the provision of labour referred to is not restricted to the provision by a worker of his own labour. The intention appears to be to make it unnecessary for the contractor to obtain consent to a “labour only” sub-contract, despite the many problems created by that form of sub-contracting. t
8. THIS CLAUSE HAS BECOME PARTLY MISLEADING because of the new cls.59A and 59B about nominated sub-contractors.