"It’s in the Head Contract – But You Can’t See It”: Why Subcontractors Need Full Visibility in Back-to-Back Agreements

It started like many subcontracting stories do.

My client, a capable and diligent subcontractor, was engaged under the SA-2017 Subcontract. The project was well underway when questions started surfacing: delays, changes in sequencing, and extra site restrictions. As we worked through the paperwork, we quickly hit a wall, almost every critical clause in their subcontract pointed to the head contract, and yet, the head contract was nowhere to be found. They asked at the stage when they were going to sign the subcontract, but the main contractor refused.

“You’re not a party to it.”“You don’t need it.”“It is confidential.”“We’ll tell you what you need to know.”

Sound familiar?

It should. Because this is far more common in the New Zealand construction industry than we’d like to admit.

The Rise of Back-to-Back Contracts: What It Really Means

Back-to-back contracting is intended to align subcontractor obligations with the head contractor’s commitments to the principal or client. In theory, it provides consistency. But in practice, it creates a serious imbalance of power and knowledge, especially when the subcontractor doesn’t have access to the head contract, or don't have the power to negotiate the subcontract conditions not linked to the head contract conditions as they weren't part of the negotiation party.

Under SA-2017, numerous provisions say things like:

“The Subcontractor agrees to comply with all the provisions of the Head Contract that apply to the Subcontract Works...”

or

“The Subcontractor shall comply with all obligations under the Head Contract to issue Design Documentation in order that the Engineer is allowed a reasonable opportunity for review...”

This kind of clause effectively imports the head contract by reference, without including the actual terms. So what happens when a subcontractor is expected to comply with something they’ve never seen? You get a signed contract with confusion, hidden disputes, and potential injustice.

Legal and Commercial Risks of Flying Blind

Here are some of the risks a subcontractor faces when bound to an unseen head contract.

1. Unfair Time-Related Risk

Under SA-2017, 10.2 Extensions of Time:

Subject to the requirements of 10.2.2, the Subcontractor is entitled to an extension of time for: a) delay resulting from any of the causes described in the Head Contract as grounds for the granting of extensions of time.

Subcontractors often rely on extension of time (EoT) provisions to avoid liquidated damages when delays occur. But if EoT rules are imported from the head contract and you don’t know them, you may miss a narrow notice period or procedural requirement that voids your claim.

2. Unseen Quality and Reporting Obligations

Under SA-2017, 5.17 Quality Plan Requirements of the Head Contract

5.17.1 Where the Head Contract requires the Contractor prepare a quality plan, the Subcontractor shall provide all reasonable assistance to the Contractor to fulfil this obligation.

What if the head contract requires fortnightly QA reports, a third-party certifier’s approval, or specific site conduct rules? If you’re held to those standards but never made aware of them, your performance could be judged against unknown metrics. That’s not just unfair, it’s grounds for withholding payment, applying set-offs, or even termination.

3. Liability Passed Down Without Consent

Under SA-2017, S2 B Subcontract Works

The Subcontractor has the same obligations and liabilities to the Contractor for Subcontract Works as those imposed on the Contractor by the terms of the Head Contract

The head contract might include onerous indemnity clauses, broad warranties, or harsh damages provisions. If these are passed down “as if” the subcontractor were the main contractor, then the subcontractor could face disproportionate liability without having priced or planned for it.

4. Variations and Compensation Ambiguity

Under SA-2017, 12.5.1 Conditions required for off-site payment

The specific conditions sections outlined " refer to Head Contract".

A clause in the head contract might cap variation claims, limit mark-up percentages, or impose compensation conditions. Without access, the subcontractor can’t prepare claim submissions properly, resulting in delayed or denied payment.

What the Law Says: Is This Even Enforceable?

This area is legally murky. Courts tend to uphold contracts freely entered into, even if they’re unfair, unless there is evidence of misrepresentation, duress, or unconscionability.

That said, importing a contract by reference (especially one not attached or disclosed) can be challenged under several legal doctrines:

• Incorporation by reference must be clear and express. If the reference is vague or the document inaccessible, courts may find it was not properly incorporated.

• Good faith and fair dealing, recognised in some contexts, can be argued to require basic transparency.

• The Contract and Commercial Law Act 2017 requires contractual terms to be communicated and agreed to, which is something hard to prove when the referenced terms are undisclosed.

  
  

But dispute is expensive, time-consuming, and damaging to relationships. For subcontractors, the goal is to avoid the fight altogether.

So, What Subcontractors Should Do

If you’re a subcontractor handed an SA-2017 (or similar) subcontract with references to the head contract, here’s how to protect yourself:

1. Always Ask for the Head Contract Before Signing

Request the full head contract upfront. Phrase it professionally:

“Given the subcontract refers to head contract conditions, I’d like to review the relevant provisions to ensure full compliance. This protects both parties and avoids future misunderstandings.”

If the contractor refuses, consider that a red flag. 

And ask yourself before signing the dotted line: why wouldn’t they want you to understand your obligations?

2. Limit or Reframe Head Contract References

Propose amending the clause to say:

“To the extent that the Contractor has provided a copy of the relevant provisions of the Head Contract to the Subcontractor…”

Or limit incorporation to specific clauses you’ve reviewed.

3. Seek Clarification on Key Terms

If access of Head Contract is denied, at minimum you can request:

• The programme and key milestone dates.

• EoT and delay damages rules.

• Site-specific obligations.

• Reporting and documentation requirements.

• Any caps or exclusions on claims.

  
  

and make sure that you get these in writing.

4. Price in the Unknowns

If you must proceed without clarity, add a contingency. Price for risk, time delays, or increased admin. Then explain:

“This allowance reflects the lack of access to the head contract, which limits our ability to plan, forecast, and price obligations with precision.”

5. Document Everything

Maintain a clear record of your requests and the responses received. If a dispute arises, your effort to obtain clarity may help your case.

What Contractors Should Do Better

This article isn’t just for subcontractors. Main contractors and developers also have a role to play in creating fairer, more transparent procurement environments.

Transparency isn’t weakness, it’s good project governance.

For best practice and project running smoothly, the main contractor or developer should:

• Provide the head contract or relevant extracts.

• Use side schedules to summarise key obligations.

• Align expectations early to avoid mid-project disputes.

Because, if your subcontractors fail, your project suffers too.

A Personal Reflection

The more I work with subcontractors, the more I see how contractual opacity compounds risk for the smallest players, the ones least equipped to bear it.

In New Zealand’s construction industry, we talk a lot about collaboration, partnership, and fairness. But real collaboration starts with transparency. And fairness can’t exist where one party holds the rulebook—and keeps it hidden.

You wouldn’t tell someone to run a race with a blindfold on. So why do we expect subcontractors to deliver multi-million-dollar works without seeing the terms that govern them?

Back-to-back contracting isn’t inherently wrong. But using it without disclosure is.

If you’re a subcontractor, don’t sign what you haven’t seen. If you’re a contractor, don’t expect compliance without visibility.

We can do better than that.

And if you’re unsure how to navigate these clauses, find someone who can help. Because the cost of not knowing is almost always higher than the cost of asking.

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Emmolina May is a Registered Quantity Surveyor, Innovative Educator, and Construction Law Specialist. Through her platform EM Fridays and her business EM, she helps NZ construction companies and professionals become dispute-ready and contract-smart before issues arise, so they can enjoy a smooth ride through the project.