Check the link between a head-contract charge and your subcontract

The builder forwards a charge from the owner

The builder sends you a notice from its client and says the amount will be passed down to your account. Obtain advice on the actual contractual connection. A charge made against the builder does not, by itself, explain what obligation you breached or how the amount is said to be recoverable from your business. Equally, do not reject it without examining the relevant documents.

Identify both levels of the claim

Imagine a subcontractor receiving a deduction described as the owner's delay charge. Record the amount and period claimed upstream, then ask what part is attributed to your work. Keep the forwarded notice and the builder's own explanation. Do not assume the entire head-contract amount concerns the same period, event or responsibility as the alleged issue under your subcontract.

Read your own agreement carefully

business.gov.au recommends clear contracts defining responsibilities and dispute arrangements. Give the lawyer your subcontract, incorporated documents and relevant amendments. Ask which terms the builder relies on and what other evidence is needed. A document from the head contract may be relevant, but its existence should not be treated as a substitute for understanding the obligations your business actually undertook.

Source: business.gov.au: Prepare a contract

Check the factual connection

In the example, compare the alleged delay period with your programme, instructions, access records and work completed. Identify other relevant events accurately without making unsupported accusations about other trades. Ask the adviser whether specialist programme analysis is needed. A simple overlap of dates may not explain the legal or factual basis for allocating the builder's full loss to one subcontractor.

Keep the amount and entitlement distinct

Ask how the claimed sum was calculated and whether the upstream figure has been resolved, disputed or merely proposed. Do not assume a settled head-contract claim automatically settles the downstream one. Have the lawyer assess the significance of those facts and any response requirements before agreeing a deduction or making a broad admission about responsibility.

Use a focused response

Provide the contract comparison, factual records and calculation questions together. Keep your own payment position and relevant deadlines active while the issue is assessed. The aim is to understand the specific connection between the builder's charge and your obligations, rather than allowing a forwarded third-party notice to become an unexplained reduction of your account.