Rights and Responsibilities of Contractors in

Enterprise Contracts

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The Contractor in Enterprise Contracts

An enterprise contract is a contract under which someone - the contractor - agrees to do physical
or intellectual work for a client in exchange for payment.
Contractors have several responsibilities under enterprise contracts:

work carefully

act in the clients best interests

make sure the work is performed on time and in keeping with the contract

follow the rules, standards and guidelines that apply in their fields, often called the rules of
art or good practices.

Control and Supervision of the Work

A contractor who has entered into an enterprise contract can choose how he will perform the
work, including the workers he will hire. The contractor always keeps control and supervision
of the work.
This means that the client cannot tell him how to do the work. However, the client can tell him
what work has to be done, oversee progress on the work and express preferences regarding the
result. For example, if a contractor agrees in an enterprise contract to renovate a building, the
client can make general comments about the work to be performed, require that certain materials
be used and ensure that the renovations are properly performed.

This independence of the contractor is the main difference between an enterprise contract and
an employment contract.
Keeping the Client Informed
Before the Contract Is Entered Into
Before an enterprise contract is entered into, the contractor must, as much as possible, provide
the client with all useful information about the work to be performed, including the materials and
time it will require. This way, the client has an idea of the cost of the work and can decide
whether or not to commit by signing a contract.

For example, before signing a renovation contract, a contractor must inform the client of how
long he expects the work to take and, if he works on an hourly rate, the number of hours he
expects to work.

The contractor must also explain to the client what the renovation work consists of and give
important details, such as the fact that the proposed contract only covers part of the repairs
necessary for the building to be returned to perfect condition or the fact that a wall will have to
be damaged to do plumbing work.

During the Work

If the contractor is paid based on the value of the work performed (for example, on an hourly
rate), he must, on request, inform the client to the extent possible about the progress of the work
and the expenses incurred so far. This way, the client can assess how much the work will cost
before getting a final bill and settle any concerns with the contractor.

The contractor must also inform the client when he realizes that the work will cost more than
what was discussed, when the nature of the work has changed or when it will take longer than
expected. This lets the client decide what he wants to do in light of the new information.

A contractor who gave a cost estimate cannot just bill a higher amount at the end of the contract
than what was given in the estimate.
Supply the Tools and Materials
In an enterprise contract, the contractor usually provides the tools, materials and other items
required to perform the contract. However, he can agree with the client that the client will
provide them.
When the contractor provides the tools, materials and other items, he must guarantee that they
are of good quality and appropriate for the work.
When the client provides the tools, materials and other items, the contractor must use them with
care. He must tell the client how he is using them and notify the client if the materials provided
are not suitable for the work or have apparent or hidden defects that a reasonable contractor
should notice.
Sub-Contracting
A contractor can perform an enterprise contract by asking another person (a sub-contractor) to
do all or part of the work for him.

However, a contractor cannot sub-contract work if the contract has been entered into specifically
because of his expertise or personal qualities, or if the very nature of the contract makes sub-
contracting impossible.

For example, a contractor can give a contract to dig a ditch to someone else. It makes no
difference who digs the ditch, as long as its dug!

But the situation is quite different if a client hires a painter he considers the next Picasso to paint
a portrait. In this case, the painter cannot sub-contract the work since the client hired him
because of some specific skill the contractor has, namely his style.

To avoid problems, the client can always say directly in the contract that the contractor cannot
sub-contract the work.

Finally, even where a contract is sub-contracted out, the contractor remains responsible toward
the client. This means that, if the sub-contractor does not perform the work or performs it poorly,
the contractor cannot merely blame the sub-contractor: he must do everything possible to correct
the situation.

Achieving the Results Required by the Contract

A contractor must obviously respect an enterprise contract he enters into with a client. But does
he have to achieve a particular result in performing the work? It all depends on the nature of the
work:

In certain situations, the contractor has an obligation to achieve a specific result (called an
obligation of result).
For example, a mover must deliver furniture to the right place, a roofer must install a roof that
doesnt leak and a cabinetmaker must create a piece of furniture that respects the clients order.

In this type of situation, the contractor is always responsible toward the client if he does not
provide the expected result, unless unexpected events clearly beyond his control prevented him
from doing so. Sometimes events beyond a persons control are called acts of God.

In other situations, the contractor must use all reasonable means to perform the work, but
hes not obliged to achieve a specific result (called an obligation of means).
For example, a contractor who performs complex work to modify an industrial machine does not
have to guarantee that his work will give the desired results, especially when the client knows
that the contractor might be not succeed.

In this type of situation, the contractor will only be responsible if he did not take all reasonable
means to achieve the result indicated in the contract.

Stopping the Work and Ending the Contract

The contractor can end an enterprise contract in some situations, just like the client can in certain
situations.
The contractor can end an enterprise contract by stopping work. However, he must respect some
rules to do this:
1. He must have a serious reason.
Examples of serious reasons:

The client interfered with the performance of the work several times.

The client refused to cooperate with the contractor.

The client wanted to change the contract without the contractors agreement.

The client was abusive, disagreeable and impolite on several occasions.

Examples of reasons that do not allow the contractor to end the contract:
The fact that he did not charge a high enough price in the contract, unless the price was set
based on wrong information given by the client.

The fact that the client is very demanding regarding performance of the work.

The fact that the client has not paid certain small amounts.

2. He must not end the contract a time that causes the client damage.
He must do whatever is necessary to ensure that the client does not suffer any immediate damage
due to stopping the work.

For example, if a contractor is hired to repair the roof of a building, he cannot stop the work in
the middle of winter and leave a large hole where snow can come in. The contractor must take
steps to avoid this damage, such as by installing a temporary roof to patch the hole.

If he received a payment in advance from the client, he must repay any extra amount he had
already received over and above the value of the work he had time to perform.
 Contractors: roles and responsibilities
Construction (Design and Management) Regulations
2015 (CDM 2015)
A contractor is anyone who directly employs or engages construction workers or manages construction
work. Contractors include sub-contractors, any individual self-employed worker or business that carries
out, manages or controls construction work. They must have the skills, knowledge, experience and,
where relevant, the organisational capability to carry out the work safely and without risk to health.

Contractors and the workers under their control are most at risk of injury and ill health from construction
work. Contractors therefore have an important role in planning, managing and monitoring their work to
ensure any risks are controlled.
Contractors on all projects must:
make sure the client is aware of the client duties under CDM 2015 before any work starts
plan, manage and monitor all work carried out by themselves and their workers, taking into account the risks to
anyone who might be affected by it (including members of the public) and the measures needed to protect them
check that all workers they employ or appoint have the skills, knowledge, training and experience to carry out the
work, or are in the process of obtaining them
make sure that all workers under their control have a suitable, site-specific induction, unless this has already been
provided by the principal contractor
provide appropriate supervision, information and instructions to workers under their control
ensure they do not start work on site unless reasonable steps have been taken to prevent unauthorised access
ensure suitable welfare facilities are provided from the start for workers under their control, and maintain them
throughout the work
In addition to the above responsibilities, contractors working on projects involving more than one
contractor must:
coordinate their work with the work of others in the project team
comply with directions given by the principal designer or principal contractor
comply with parts of the construction phase plan relevant to their work
Where a contractor is the only contractor working on a project, they must ensure a construction phase
plan is drawn up before setting up the site.
When working as the only contractor for a domestic client, the contractor takes on the client duties, as well
as their own as contractor. However, this should involve them doing no more than they will normally do to
comply with health and safety law.
Where a domestic project involves more than one contractor, the principal contractor normally takes on
the client duties and the contractor will work to the principal contractor as client. If the domestic client
does not appoint a principal contractor, the role of the principal contractor must be carried out by the
contractor as principal contractor and the client duties must be carried out by the contractor in control of
the construction phase and the client duties must be carried out by the contractor as principal contractor.
Alternatively, the domestic client can ask the principal designer to take on the client duties (although this
must be confirmed in a written agreement) and the contractor must work to them as client under CDM
2015.