Can they set off contra-charges against my final account?
Yes, but only where each charge has a proper basis, in your subcontract or in law, and an amount the evidence supports.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
Set-off means your main contractor taking a sum it says you owe out of the sum it owes you. A contra-charge is one particular cost it puts forward, such as making good, attendance or delay. For each item, check your subcontract, what caused the cost, the records and the amount. Check the notices for the final payment as a separate point. A notice problem may affect that payment without deciding who is right in the end. A charge that first appears at final account is not proved or defeated by its timing alone. So keep the schedule, and answer each line rather than accepting or rejecting the total.
Example
Illustrative example. The scenario and figures are invented.
The facts
A plastering subcontractor's £46,000 account comes back with £40,000 of proposed charges: £15,000 for defects, £12,000 for cleaning and £13,000 for alleged delay. The subcontractor answers each charge line by line, not as one total.
What happens
- For each line, the subcontractor records the event and location alleged, the basis given and the evidence. It also records the amount and how it was split, any credit, whether the cost was kept down, and where its answer stands.
- For the £12,000 cleaning item, an invoice alone leaves three questions open. Which areas were cleaned, why is the work put down to the subcontractor, and does it overlap an earlier deduction?
- The subcontractor logs each evidence request, and who is chasing it, beside the amount.
The proposed charges
| Item | Amount |
|---|---|
| Subcontractor's account | £46,000 |
| Defects | £15,000 |
| Cleaning | £12,000 |
| Alleged delay | £13,000 |
| Charges in total | £40,000 |
The outcome
Some items may stay supported, and others may need evidence or advice. The schedule records which is which, without saying that any charge automatically fails or must be paid.
A delay charge is tested against the completion date after any extension of time, a separate question from the defects and cleaning lines.
Our Contra-Charge Claim service answers deductions you have received.