Head contract

The head contract is the contract between the principal (client) and the head contractor (builder) - the document above your subcontract, whose terms often flow down to you through incorporation clauses even though you have never seen it.

Flow-down drafting takes several forms: subcontract obligations defined by reference to the head contract, LD exposure passed through at head-contract rates, retention and DLP tied to head-contract milestones. Each one makes your risk depend on a document you typically cannot read.

Why it matters to subbies

Where a clause references the head contract, ask for the relevant extracts before signing - and resist milestones (PC, DLP, retention release) being defined by someone else's contract.

General information for Australian subcontractors, not legal advice - contract drafting and state legislation vary and change; your document and your state's Act govern. Written by Mat Kennedy at The Construction Contracts Co.