Back Charge Dispute Letter Template for Subcontractors

When a head contractor sends you a back charge, the clock starts immediately. Most subcontractors lose money on charges they could have defended — not because they had no defence, but because they did not respond in time, or did not respond in writing with clause references.

This post gives you the template, the structure, and the five clauses to reference every single time.

What a back charge dispute letter must include

A defensible written response always contains the following, in this order:

1. Acknowledgment of receipt of the back charge notice. One sentence. Include the date you received it and the alleged amount. 2. Statement of position. Plain language. "Following review of the contract Scope of Works, we do not accept liability for this charge." 3. Numbered grounds. Three or fewer. Each ground cites a specific clause. 4. Request for substantiation. Ask the head contractor for written evidence — photos, dates, the specific contract clause they rely on. 5. Reservation of rights. One sentence at the end.

If you do not have a written Scope of Works to reference, the letter still works — but you request substantiation rather than asserting grounds.

The 5 clauses to always reference

Every Australian commercial subcontract has variations of these five clause types. Find them in your contract before you respond:

1. Scope of Works clause. Defines what is in and out of your scope. If the work the back charge covers is outside your SOW, this is your strongest ground. 2. Defects rectification period. Limits when a head contractor can claim against you for defects. After the period closes, charges are out of time. 3. Notification provisions. Specify how and when a head contractor must notify you of a defect or back charge. If they missed the notice period, the charge is invalid on that ground alone. 4. Damage caused by others. Most contracts place liability for damage caused by other trades on the head contractor, not the trade subcontractor. 5. Protection of completed works. Most contracts require the head contractor — not the trade subcontractor — to protect completed works against damage from following trades.

If the back charge does not survive these five clauses, you have a strong defence.

Template letter — copy and paste

Replace the placeholders in square brackets. The rest is ready to send.

Subject: Re: Back Charge Notice — [Job Code] — [Short Description]
Dear [Head Contractor Contact Name],
We acknowledge receipt of your back-charge notice dated [Date Received] for $[Amount] covering [brief description] at [location].
Following review of the contract and Scope of Works, we do not accept liability for this charge for the following reasons:
1. Clause [X] (scope inclusions) confirms our scope is limited to [original installation / specific item]; [the work the back charge covers] is excluded.
2. Clause [Y] (defects rectification period) places liability for damage outside our trade boundary on the head contractor, not the trade subcontractor.
3. No evidence has been provided that our trade was on site during the period the alleged damage occurred.
We request that you provide written substantiation — including photographic evidence with timestamps and the specific contractual basis — to support the charge before we will give it further consideration.
We expressly reserve all rights under the contract.
Regards, [Your Name] [Your Company] 

Common mistakes to avoid

• Not responding in writing within 7 days. Even if your contract does not specify a response window, silence is taken as acceptance in many builders' minds. Always reply within a week.
• Conceding liability accidentally. Phrases like "we accept that we may have caused some of this damage" hand the head contractor a written admission. Do not concede anything in writing.
• Citing clauses without quoting them. Reference the clause number AND the substance of what it says.
• Forgetting to request substantiation. The burden of proof is on the party making the claim. Always shift it back.
• Sending the response by SMS or verbal call. Always email. Always copy the director and the project manager.

Next steps after you send the dispute letter

1. Wait 14 days. If they do not respond with substantiation, follow up with a second written request. 2. If they respond by escalating — e.g. lodging a payment claim or invoice deduction — you can still defend. The dispute letter is the start of the chain of evidence. 3. Document the chain. Save every email, every photo, every site instruction. The defensible position is built from documentation, not arguments.

What this looks like inside TradeControl

TradeControl auto-drafts dispute responses from your indexed Scope of Works. The bot reads the back charge, retrieves the relevant SOW clauses for that job and trade, and produces a numbered defence letter with clause references — in under 30 seconds. You review, edit if needed, and send.

If you want to see how it works on a real job:

Book a 20-minute demo

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TradeControl provides commercial support only. Not legal advice. Always seek specialist legal advice for material disputes.