Contractor and subcontractor

Construction is delivered through a chain of two-party contracts, and the chain's defining legal fact is privity: the owner and a subcontractor, though they meet daily on site, generally have no contract with each other. The main contractor answers to the owner for all of the work, including the sixty percent it subcontracted; each subcontractor answers to the main contractor alone. Obligations travel down the chain through flow-down clauses that push main-contract terms into subcontracts, and money travels the same path, with each link's payment terms compounding the delay to the link below.

The chain's health depends on back-to-back alignment: the subcontract's scope, specifications, programme and risk terms mirroring the relevant slice of the main contract. Every gap between the two is a risk the main contractor is holding without having priced — a scope item owed upward but not purchased downward.

Owners break the chain from above, most often by instructing subcontractors directly — expedient in the moment, and a gift to any later dispute, since it blurs exactly the single line of responsibility the structure exists to preserve.