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BUILDING INDUSTRY FAIRNESS (SECURITY OF PAYMENT) ACT 2017 - SECT 6

Subcontracts, subcontractors and subcontracted work

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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