Identify which main contract obligations should, and should not, be flowed down word for word into a subcontract.
Law & Contract Management
Back-to-Back Subcontract Terms and Pay-When-Paid Clauses
Trains contract managers and construction lawyers to draft back-to-back subcontracts that mirror main contract risk without falling foul of restrictions on pay-when-paid clauses.
🗓️Duration5 training days
📚Content4 modules · 8 sessions
🎓On completionAccredited attendance certificate
About the programme
Course Overview
Main contractors promise employers one set of obligations, then all too easily hand subcontractors a looser set on paper, leaving the risk the subcontract was meant to pass down sitting with the party who agreed to shed it. Back-to-back drafting is meant to close that gap, but mirroring a main contract clause for clause often creates subcontract terms that make no commercial sense, or that breach statutory restrictions on conditional payment. This course examines how to build a genuinely back-to-back subcontract: which main contract obligations should flow down word for word, which need adaptation because the subcontractor cannot control the risk in question, and which should not flow down at all. It gives close attention to pay-when-paid and pay-if-paid clauses, the statutory restrictions that make most conditional payment terms unenforceable except on main contractor insolvency, and the lawful alternatives contractors use to manage cash flow risk instead. Later sessions cover flow-down of time, variation, extension of time and dispute resolution provisions, and the practical drafting techniques that keep a subcontract enforceable, coherent and fair enough to attract capable subcontractors. Delegates review and redraft a flawed back-to-back subcontract and a non-compliant payment clause during the course.
Expected Learning Outcomes
Draft flow-down clauses for time, variations and extension of time that remain workable at subcontract level.
Explain why most pay-when-paid clauses are unenforceable except where they are triggered by upstream insolvency.
Draft a lawful conditional payment clause limited to the main contractor insolvency exception where it applies.
Structure alternative cash flow protections for a main contractor without relying on unenforceable payment terms.
Align subcontract dispute resolution and notice provisions with the main contract to avoid procedural mismatches.
Review a subcontract for gaps that leave a main contractor exposed to risk the subcontract was meant to pass down.
Who Should Attend
Construction lawyers drafting and negotiating main contracts and subcontracts
Contract and commercial managers at main contractors responsible for subcontract procurement
Subcontractors' commercial teams reviewing and negotiating incoming back-to-back terms
Quantity surveyors administering payment under main contracts and subcontracts
Procurement managers setting standard subcontract terms across a contracting business
In-house counsel advising on supply chain risk allocation in construction and engineering
Course Modules
Select any module to see its sessions and points.
01Principles of Back-to-Back Drafting
2 sessions · 8 points
Session 1What Back-to-Back Drafting Actually Means
- Define back-to-back drafting as aligned risk allocation rather than identical wording copied from the main contract.
- Identify obligations, such as design responsibility, that cannot sensibly flow down unchanged to a subcontractor.
- Assess the commercial and legal consequences of gaps where main contract risk is not matched by subcontract terms.
- Map main contract clauses against subcontract equivalents to build a flow-down comparison schedule.
Session 2Common Flow-Down Failures and Their Consequences
- Recognise mismatched notice periods and condition precedents that leave a main contractor unable to pass on claims.
- Identify definition mismatches, such as differing practical completion tests, that undermine back-to-back intent.
- Assess how a mismatched limitation or exclusion clause can leave a main contractor bearing uninsured risk.
- Evaluate the cost of remedying flow-down gaps after a dispute arises compared with fixing them at drafting stage.
02Flowing Down Time and Change
2 sessions · 8 points
Session 1Programme, Extension of Time and Delay Flow-Down
- Draft subcontract extension of time provisions that mirror the main contract's grounds and notice requirements.
- Align subcontract programme obligations with main contract milestones without over-constraining the subcontractor.
- Pass through liquidated damages exposure proportionately, avoiding double recovery across multiple subcontracts.
- Coordinate concurrent delay and critical path assessment where subcontractor and main contractor delay overlap.
Session 2Variations and Change Management Flow-Down
- Mirror main contract variation procedures in the subcontract so instructions and valuations flow through consistently.
- Set subcontract variation valuation rules that remain consistent with the main contract's own valuation basis.
- Address variations instructed directly by the employer or its representative without the main contractor's involvement.
- Draft change management timetables that let a main contractor pass down instructions within main contract deadlines.
03Payment Terms and Statutory Limits
2 sessions · 8 points
Session 1Why Pay-When-Paid Clauses Usually Fail
- Explain the policy reasons statutory regimes restrict conditional payment clauses in construction contracts.
- Identify the narrow main contractor insolvency exception under which conditional payment terms remain lawful.
- Distinguish pay-when-paid from pay-if-paid clauses and assess the enforceability of each under applicable law.
- Recognise disguised conditional payment wording that a tribunal is likely to strike down despite its drafting.
Session 2Lawful Payment Structures for Main Contractors
- Draft payment terms that satisfy statutory notice and timing requirements while protecting reasonable cash flow.
- Use retention, milestone payment and performance security instead of unenforceable conditional payment clauses.
- Align subcontract payment cycles with main contract certification to reduce the funding gap a contractor carries.
- Advise on set-off and abatement rights available to a main contractor without relying on pay-when-paid wording.
04Disputes, Termination and Portfolio Consistency
2 sessions · 8 points
Session 1Aligning Dispute Resolution Across the Contract Chain
- Match subcontract dispute resolution provisions to the main contract to avoid inconsistent findings on the same facts.
- Draft joinder or consolidation provisions that let related main contract and subcontract disputes be heard together.
- Coordinate statutory adjudication rights at subcontract level with any parallel main contract adjudication.
- Address confidentiality and information-sharing needed to run linked disputes without breaching either contract.
Session 2Termination, Insolvency and Standard Form Maintenance
- Align termination triggers and consequences between main contract and subcontract to prevent an orphaned position.
- Draft step-in and novation rights that let a main contractor manage a failing subcontractor without losing the main contract.
- Address subcontractor insolvency provisions consistently with retention and performance security arrangements.
- Maintain a standard back-to-back subcontract template so lessons from disputes are fed back into future drafting.
What the participant receives
4 course modules
A structured syllabus
8 training sessions
across 5 days
32 detailed points
Applied, detailed content
Accredited attendance certificate
On completing the programme
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