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BUILDING INDUSTRY FAIRNESS (SECURITY OF PAYMENT) ACT 2017 - SECT 6
Subcontracts, subcontractors and subcontracted work
(1) A contract is a
"subcontract" for another contract if— (a) performance of the contract
contributes to the performance of the other contract because the work,
required to be carried out under the contract, will form all or part of the
work required to be carried out under the other contract; and
(b) the
contribution mentioned in paragraph (a) is not merely coincidence. Example for
paragraph (b)— the purchase of tools from a retail store
(2) To remove
any doubt, it is declared that— (a) the contribution mentioned in subsection
(1) (a) may be indirect because the contract contributes to the performance of
1 or more other subcontracts in order to contribute to the other contract; and
Note— A subcontract that contributes directly to a contract would have 1
entity that is both a party to the subcontract and a party to the contract.
(b) a contract may be a subcontract for another contract regardless of whether
any party to the contract is also a party to the other contract.
(3) If the
party to a contract, who is required to carry out work under the contract,
subcontracts all or part of the work— (a) the resulting subcontract is a
subcontract for the contract; and
(b) the person required to carry out the
work under the subcontract is a
"subcontractor" for the contract; and
(c) the work required to be carried out
under the subcontract is the
"subcontracted work" for the contract.
(4) The categories of subcontracts are
first tier subcontracts, second tier subcontracts, third tier subcontracts and
so on.
(5) A subcontract is a
"first tier subcontract" for a contract if— (a) performance of the
subcontract contributes directly to the performance of the contract; and
(b)
1 person is both a party to the subcontract and a party to the contract.
(6)
A subcontract is a
"second tier subcontract" for a contract if— (a) performance of the
subcontract contributes to the performance of the contract only by also
contributing to the performance of another subcontract for the contract; and
(b) no party to the subcontract is also a party to the contract; and
(c) 1
person is both a party to the subcontract and a party to the other
subcontract.
(7) A subcontract is a
"higher subcontract" for another subcontract if— (a) performance of the
other subcontract contributes to the performance of the subcontract because
the work, required to be carried out under the other subcontract, will form
all or part of the work required to be carried out under the subcontract; and
(b) both subcontracts are subcontracts for the same contract.
Example— A
first tier subcontract would be a higher subcontract for a third tier
subcontract if the work required to be carried out under the third tier
subcontract will form all or part of the work required to be carried out under
the first tier subcontract.
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