Subcontractor without the client's consent

What the law says about the execution of work by third parties

The default statutory rule under Czech legislation gives the contractor relatively broad freedom. The contractor either performs the work personally or has it performed under their personal supervision; this does not apply if the performance of the work is tied to the personal qualities of the contractor or if it is not necessary due to the nature of the work (Section 2589 of the Civil Code).

For a standard construction or manufacturing contract, this means that the use of subcontractors is a legally anticipated and permitted procedure, unless the contract stipulates otherwise. Where the execution of the work does not depend on the personal qualities of the contractor, the contractor does not even need to personally supervise the subcontractors' work. Where it does depend on them, typically when the client selected a specific contractor for their personal expertise or reputation, the contractor must perform the work themselves, or at least under their personal supervision. Restrictions can thus arise from the nature of the work even without an explicit prohibition in the contract.

This rule is non-mandatory (dispositive) and the parties can deviate from it by contract: explicitly prohibit the use of subcontractors, make it conditional on the client's prior consent, or, conversely, explicitly permit it. Without such an agreement, the contractor can rely on the fact that the law allows the use of subcontractors for standard work. However, they must assess for themselves whether the nature of the work or public law requirements for expertise do not require personal performance. Similar non-mandatory rules, from which parties can contractually deviate, also apply to other issues in business relations, as shown in the article on commercial contracts versus purchase orders.

When a contract requires consent for a subcontractor

For standard works, the client's prior consent to a subcontractor is not a statutory rule; it arises primarily when the contract establishes it as a condition. The mere fact that it is a major contract does not establish a requirement for consent. A typical formulation is a provision according to which the contractor may not entrust the execution of the work or a part thereof to a third party without the prior written consent of the client, possibly with the exception of subcontractors listed directly in an annex to the contract.

The second common variant is the contractor's obligation to merely notify the subcontractor, not to request consent. The client thus learns about the involvement of the subcontractor but does not have the right to reject them. This milder variant gives the client an overview of who is actually working on the contract without preventing the contractor from operationally addressing capacity shortfalls.

A third variant, applicable where the client wants to maintain control without tedious approval processes for each subcontractor, is a pre-approved list of vetted subcontractors. The contractor can draw from it without further consent and only request consent for subcontractors not on the list.

The choice between these variants should correspond to how sensitive the project is and how often the contractor actually changes subcontractors. For a one-off contract with a clearly defined scope of work, it makes sense to require consent for each subcontractor individually. For a long-term framework relationship with repeated partial orders, an approved list is more practical because it allows the contractor to respond to capacity shortfalls without delay.

A fourth, less common variant is a combination based on the type of activity: full consent for key parts of the work where specific expertise matters, and only a notification obligation for supporting work. This combination requires a more precise definition in the contract, but better corresponds to the actual risk structure of more complex projects, where not all parts of the work carry the same weight for the final outcome.

What happens if a contractor uses a subcontractor without consent

Using a subcontractor in violation of a contractual consent condition is a breach of contract, not a ground for the invalidity of the performed work. If a party breaches a contractual obligation, they shall compensate for the damage resulting therefrom (Section 2913 of the Civil Code). However, compensation assumes that the client proves and quantifies the damage; a mere breach of the clause without damage does not establish a claim for compensation.

At the same time, damages are not the only remedy. The client can insist on the proper performance of the contract, which includes demanding that the contractor withdraw the unapproved subcontractor from the project, if this follows from the content of the obligation. If the breach is material, the client may withdraw from the contract without undue delay even without a specific withdrawal clause (Section 2002 of the Civil Code). A breach is material if the breaching party knew or must have known at the time of concluding the contract that the other party would not have entered into the contract had they foreseen it. In other cases, it is presumed not to be material.

Without a contractual penalty, the breach is therefore harder to penalize, though not without risk. The client must resort to general remedies: proving the occurrence and amount of damage for compensation claims, and the materiality of the breach for withdrawal. If the subcontractor performed the work without defects and without delay, there is often no damage and materiality is difficult to prove. Contracts that handle this situation well therefore link the breach of the consent obligation to a contractual penalty, which can be claimed regardless of whether damage occurred (Section 2048 of the Civil Code), and to an explicit right to demand the replacement of the subcontractor.

However, when it comes to a contractual penalty, it is necessary to consider its relationship to damages. If a contractual penalty is agreed upon, the creditor does not have the right to damages arising from the breach of the obligation to which the penalty applies under Section 2050 of the Civil Code. If an unapproved subcontractor could cause damage exceeding the penalty, the contract should explicitly state that the right to damages is preserved alongside the penalty.

Furthermore, a client who discovers the use of an unapproved subcontractor only during implementation faces a practical dilemma. Insisting on immediate replacement may delay the project more than if the subcontractor finished the work. A well-structured contract therefore gives the client a choice in advance between immediate replacement and retroactive approval. It should explicitly state whether retroactive consent preserves an already arisen claim to a contractual penalty. If the penalty arises at the moment of the breach, subsequent consent does not necessarily cancel it on its own.

Such flexibility is beneficial for both parties. The client retains leverage in the form of a penalty even if they retroactively approve the subcontractor, and the contractor avoids a situation where formal insistence on replacement would deprive them of a subcontractor they actually need to complete the project on time.

Special regime for public contracts

In the case of public contracts for construction work and contracts for services provided at a facility under the direct supervision of the contracting authority, the selected contractor is obliged to submit to the contracting authority the identification details of the subcontractors of these works or services, if known to them, no later than ten working days from the receipt of the notification of the selection of the contractor, or from the conclusion of the contract (Section 105(3) of the Public Procurement Act). Subcontractors involved later must be identified before they begin their performance.

In addition, the contracting authority may require in the procurement documents that the participant identify in its tender the parts of the contract to be performed through subcontractors, or submit a list of them. For service, construction, and supply contracts involving installation or assembly, it may also stipulate that designated significant activities must be performed directly by the selected contractor (Section 105(1) and (2) of the same Act). This can completely prevent the transfer of a key part of the performance to subcontractors, whether the general contractor wishes to do so or not.

A contractor bidding for public contracts must therefore consider, even before submitting a tender, what share of the performance they can handle with their own capacities and where they will have to declare subcontractors in the tender. A subsequent change of subcontractor may be limited by the procurement conditions, qualification rules (especially if the contractor demonstrated qualification through the subcontractor), or the contract itself. However, the mere replacement of a standard subcontractor is not automatically a modification of the commitment. If it simultaneously affects the content of the contractual commitment, the rules for modifying a commitment under Section 222 of the Public Procurement Act must also be assessed.

The contracting authority may establish an obligation to identify subcontractors for further levels of the supply chain as well, not just for the direct subcontractors of the selected contractor. The general contractor must then keep track of who their subcontractors hire. They must reflect this obligation in contracts with their subcontractors; otherwise, they will not be able to fulfill it themselves.

The identification obligation is deemed fulfilled if the details are entered in the construction logbook in accordance with other legislation (Section 105(5)). A properly maintained construction logbook can thus serve a dual purpose: as a technical record of the construction progress and as fulfillment of the obligation towards the contracting authority. Contractors who keep the logbook formally and incompletely may lose the opportunity to fulfill the obligation in this manner and must fulfill it separately.

Contractor's liability for subcontractors even with consent

If a debtor performs through another person, they are liable as if they performed themselves (Section 1935 of the Civil Code). Granting consent to a subcontractor therefore does not relieve the contractor of liability for the outcome of the work. As a rule, the client has contractual claims arising from defects against the contractor, not against the subcontractor with whom they have no contractual relationship. An exception is the special regulation for buildings and potential non-contractual liability for damage, if its prerequisites are met.

For buildings, the law goes further: if defective performance was provided, the contractor's subcontractor is also jointly and severally liable with the contractor with respect to what they themselves supplied, unless they prove that the defect was caused solely by a decision of the contractor or the person exercising supervision over the construction (Section 2630(1)(a) of the Civil Code). The client can thus assert a claim against both the contractor and the subcontractor for a defectively constructed building, which gives them better enforceability where the contractor is financially weaker than the subcontractor who actually performed the work.

Joint liability is the reason why vetting a subcontractor before granting consent makes sense even where the contract does not explicitly require it. A defective part from an unvetted subcontractor impacts not only the contractor's reputation with the client but also their direct financial exposure, similar to a defective part incorporated into one's own product, as discussed in the articles on claiming a discount due to a machine defect and defective part from a subcontractor damaged your product, what a quality agreement solves.

The benefit for the client is mainly procedural, not that the subcontractor bears a larger share of the damage than the contractor. The client does not need to have a contractual relationship with the subcontractor. However, they must assert and prove that it is a defect relating to what that particular subcontractor supplied; any defect in the building is not sufficient. Only then does the burden of proof lie on the subcontractor to show that the defect was caused solely by a decision of the contractor or the supervisor.

How to set up consent in the contract correctly

The first step is to decide whether the project requires consent before each deployment of a subcontractor, or whether a notification obligation or a pre-approved list is sufficient. The choice depends on how critical the identity of the specific subcontractor is to the quality or credibility of the entire project.

The second step is to link the breach of the consent obligation to a specific, enforceable penalty, not just a general reference to damages. A contractual penalty for using an unapproved subcontractor and the right to demand their replacement give the client a tool they can use immediately, without proving the amount of damage. At the same time, it is advisable to regulate the relationship of the penalty to damages and explicitly state when it constitutes a material breach justifying withdrawal.

The third step is to address the situation where a subcontractor drops out during the project and a replacement needs to be found quickly. A strict consent process with no exception for urgent situations can slow the contractor down precisely when they need to act quickly to avoid delays similar to those described in the articles on suspension of work and postponement of the completion date and The subcontractor delayed you and the penalty is on you.

The fourth step for public contracts is to align the contractual terms of consent with the requirements of the procurement documents so that the two regulations do not conflict. A contract with a general contractor that is silent on obligations under the Public Procurement Act can lead to the contractor meeting the conditions towards the client but breaching obligations towards the contracting authority, or vice versa.

The fifth step, particularly important for multi-year contracts, is the regular updating of the approved list of subcontractors according to how the actual structure of the supply chain changes. A list approved at the beginning and never updated ceases to correspond to reality and loses its control function, without either party necessarily noticing.

Exactly how to set the scope of consent and its penalty for a specific contract depends on how critical the subcontractor's identity is and the nature of the contract. Therefore, the Czech legal team at ARROWS advokátní kancelář always assesses this based on the specific type of performance, rather than using a universal template contract clause.

Risks of a subcontractor without the client's consent

Final Summary

The law allows the contractor to have the work performed by a subcontractor under their supervision, unless the contract provides otherwise and the nature of the work does not require personal performance. For standard works, the client's prior consent therefore stems from the contract, not from the law itself. The value of a consent clause stands and falls with whether it is linked to an enforceable penalty, and the contractor remains liable for the subcontractor even with the client's consent.

For both the general contractor and the client, this implies a clear task: to decide how strict a consent regime the project actually needs and to link it to a specific penalty for breach. Without a penalty, the client is left relying on general remedies, which are more difficult and slower to enforce in practice.

The Prague-based legal team at ARROWS advokátní kancelář sets contractual conditions for the involvement of subcontractors according to the type of contract, aligns them with public procurement requirements, and assesses the contractor's liability for subcontractors even where they have been properly approved. Write to us at consultation@arws.cz or review our contracts and negotiation practice.