Most subcontractors sign JCT contracts without reading them properly. The standard JCT form is relatively balanced — but when a main contractor amends it, the balance shifts. Those amendments are where the traps live.
Here are five clauses that cost contractors money on almost every project where they appear unchecked.
Trap 1: The payment notice timebar
The Housing Grants, Construction and Regeneration Act 1996 (as amended 2011) gives you the right to be paid. But that right depends on you following the payment mechanism correctly. Many JCT amendments require you to submit your payment application by a specific date and in a specific format. Miss the deadline — even by a day — and you lose your right to payment for that period.
The standard JCT subcontract allows the payer to issue a Pay Less Notice reducing the payment. But amended contracts often extend the Pay Less Notice window, compress your application window, or require applications to be made at specific times of the month. If you apply on the 20th when the contract requires the 15th — the payer can argue no valid application was made.
The trap: "Interim applications shall be submitted on the last working day of each month." You submit on the 1st of the following month. The contractor issues a Pay Less Notice for the full amount on the basis there was no valid application. Courts have upheld this argument.
The fix: Identify the application dates before signing. Diarise them. Set up a system to submit applications without fail. Better: negotiate a wider application window ("within 5 working days of the Valuation Date") at the outset.
Trap 2: Unlimited liability for consequential loss
JCT contracts typically limit your liability to "direct loss and/or expense arising from the breach." Some main contractor amendments remove this limitation and add indemnity clauses that extend your liability to consequential loss — including the contractor's losses arising from your delay.
On a large project, a two-week delay by a subcontractor could trigger liquidated damages claims from the client to the main contractor of tens of thousands of pounds per week. If your contract contains an unlimited indemnity, the MC can pass that directly to you — even if you caused only part of the delay.
The trap: "The Sub-Contractor shall indemnify and hold harmless the Contractor from and against all claims, damages, losses and expenses (including legal fees) arising out of or in connection with the performance or non-performance of the Sub-Contract Works." No cap. No limitation to direct loss. Potentially unlimited.
The fix: Negotiate a cap on liability — typically 100–200% of the subcontract sum. Ensure consequential loss is excluded. If the MC will not agree a cap, at minimum ensure the indemnity is proportional to causation ("to the extent caused by").
Trap 3: Retention — released at the wrong time
Retention is standard. Half is typically released at Practical Completion of the main contract works; the other half at the end of the Defects Liability Period. But two common amendments change this unfavourably.
Amendment 1: Main contract PC triggers release, not sub-contract PC. If PC of the main contract is delayed by another subcontractor, your retention is not released even though your works are complete. You have no control over when you get paid.
Amendment 2: Defects Liability Period extended beyond 12 months. Standard DLP is 12 months. Some contractor amendments specify 24 months. You are waiting two years for the final 2.5% of your contract sum — potentially with no interest payable.
The trap: "The final retention release shall occur at the earlier of: (a) issue of the Final Certificate under the Main Contract; or (b) three years from Practical Completion of the Sub-Contract Works." Three years. With no interest for late payment.
The fix: Tie release to sub-contract PC (not main contract PC) where possible. Cap the DLP at 12 months. Require interest to accrue on late retention release at Bank of England base rate + 8% (Late Payment of Commercial Debts Act 1998).
Trap 4: Back-to-back with the main contract
Some MCs include a clause stating that the subcontract is "back-to-back" with the main contract, or that the terms of the main contract are incorporated into the subcontract. You are then bound by obligations in a contract you have never seen.
This matters because the main contract may contain obligations on programme (with LDs you could inherit), design requirements, environmental targets, and insurance levels that differ from what you priced for. If the MC is not performing against the client — their delays or failures become your problem under back-to-back provisions.
The trap: "The Sub-Contractor acknowledges that it has reviewed the Main Contract and agrees to perform its obligations in a manner that enables the Contractor to fulfil its obligations thereunder." You signed without having seen the main contract. You are now bound by it.
The fix: Always request a copy of the relevant main contract terms (at minimum: programme, LD rates, insurance schedule, design obligations) before signing. If back-to-back is unavoidable, limit it to specific identified clauses rather than the whole contract.
Trap 5: Suspension and termination asymmetry
Under the HGCRA 1996 you have the right to suspend works for non-payment after a 7-day notice. Standard JCT preserves this. But many amendments add pre-conditions: you must have attempted to resolve the dispute; you may only suspend the specific works affected; you must give additional notices. Your right to suspend becomes practically worthless.
Meanwhile, the contractor's right to terminate your employment is often made easier — they can terminate if you are in "material breach" (broadly defined), if you become insolvent, or if the works fall behind programme. Termination for the contractor's convenience is sometimes included with limited compensation rights for you.
The trap: The contractor can terminate at will with 14 days notice and pay you only for work done to date — no loss of profit, no overheads on unperformed work. You assumed this risk without knowing it.
The fix: Ensure termination for convenience carries compensation for loss of profit on the unperformed works, not just the certified value of completed works. Preserve your HGCRA suspension right without additional pre-conditions.
The bottom line
None of these traps require specialist legal knowledge to spot. They require someone to read the contract carefully and know what to look for. On a £500,000 subcontract, a one-hour review that costs £100 and identifies a clause creating unlimited liability is the best return on investment on the project.
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