One of the common features of back-to-back contracts is the provision that payment to the subcontractor is subject to payment from the main contractor under the main contract. However, these pay-when-paid clauses are not applicable in construction contracts under the laws of certain jurisdictions, including England, Wales and Singapore. Sometimes a pay when certified clause is considered an appropriate compromise, if not prohibited in the relevant jurisdictions, as will soon be the case in England and Wales. Although these clauses are not prohibited by current legislation, they are often rejected by subcontractors who expect to be paid once they are due to their subcontracting obligations, regardless of the higher position in the chain. In another case, which was discussed at the end of April 2016, the client did not pay due to defects in the work. The court decided that, despite the “back-to-back” clause, the main contractor was required to pay the subcontractor because the default came from the main contractor. A back-to-back loan is a loan in which two companies borrow the currency of the other in different countries. They borrow their currencies for a certain time interval. The two companies then return the other`s currency on a given date. Commercial intermediaries use a back-to-back document to open a second credit in favor of a seller (supplier).
With this type of lease, the tenant can evacuate the property immediately. The lessor pays the tenant`s rent in the old premises until the end of the term. For many construction projects, the contractor enters into an agreement with a contractor for the entire work and the contractor then enters into subcontracts for segments of the work. Agreements entered into by the subcontractor often contain a back-to-back clause. The importance of a back-to-back clause is that the agreement between the main contractor and the subcontractor is subject to the agreement between the original customer and the main contractor and that the original customer is usually the only one to confirm the work and that the payment and payment from the main contractor to the subcontractor depends on the receipt of payment from the main contractor. A back-to-back contract can relate to many different things, but it is most often used in construction.3 min read In its strictest form, back-to-back refers not only to the replication of contractual rights and obligations at different levels of the contract, but also to the requirement that the terms of the contract be included at one level in lower-level agreements. So there are clear benefits for contractors in implementing back-to-back agreements.. . .