At the start of every construction project you sign a stack of papers that will dictate your success or failure on the project: the construction contract. The contract may be short and sweet, or it may be a mountain of paperwork that not only includes its own provisions but also cites provisions in other paperwork stacks.
Construction contracts are historically confusing documents and they contain a bunch of popular provisions with confusing interpretations like pay when paid clauses, indemnity provisions, claim notice requirements, and more. Plus, the provision may mean one thing under one state law and something completely different under another state’s law.
What can you do?
Get An Attorney To Review Every Contract
Last year, Seth Smiley wrote an article on our blog suggesting that with construction contracts you should “pay now to save later.” The point of this title and article simply underscored the importance of spending a little time with the contract language at the very start of the projects.
Perhaps your company actually pays money for an attorney to review the contract, or maybe they pay by putting in some quality time to review the document themselves. Whatever the case, it’s important to give construction contracts serious review before starting to work underneath it.
Having an attorney review your construction contract does not need to be complicated. In fact, here at Wolfe Law Group, we offer a flat fee for contract review services. Provide the contract documents to us, and we’ll turn around a review in a day or two. The review will include an opinion letter that sets forth two major things:
- Provisions that should be concerning and perhaps changed (i.e. Alerts)
- Provisions that require you to perform certain actions during the course of the project (i.e. Notification Lists)
- Answers to any specific questions you may have
Having an attorney review your contract at the onset of a project will give your company peace of mind about their duties under the terms, and will help your company avoid bad situations.
Don’t Underestimate The Power Of The Contract
It’s unfortunate, but a lot of companies spend a great deal of time preparing their bid and selling their company to get a project. When they finally get the job, the salesperson, estimator, or business owner is ecstatic and just wants to get started. That’s understandable, but don’t allow the owner or general contractor to take advantage of your position and pass you a construction contract that is one-sided against you.
A strong contract that has provisions to the owner’s or general contractor’s favor can be crushing to a business in the event of a dispute, payment delay, or more.
Don’t let your excitement or desire for the project get ahead of you. General contractors and owners will negotiate a contract with you, and they expect push back on certain terms. If you allow them to roll over your company, however, they will.