5 Clauses Contractors and Subcontractors Should Negotiate
Our Bradenton construction lawyers believe that drafting legal documents is an essential process that can help ensure the success of the general contractor and subcontractor relationship. Contractors and especially subcontractors should scrutinize contracts to look out for their own best interest. For this reason, we would like to discuss pertinent clauses that deserve careful attention.
1. Site Conditions
If the site conditions differ materially from what was indicated in the contract or from what is normally encountered on construction sites, contractors should not bear this risk. Where delays occur due to the differing site conditions, equitable adjustments should be provided so that contractors can complete their work.
Be sure the indemnification clause is worded as to not leave one party responsible for all of the liability even when they are not solely the negligent party. Subcontractors should not be held liable for the contractor’s negligence and vice versa.
3. Liquid Damages
Liquid damages clauses are great because they allow parties to predetermine delay damages. Reasonable time extensions should be given to avoid hasty project completion for a defect free finished product.
4. Lien Waivers
Lien waivers are about shifting risk. For the contract to be mutually beneficial this risk shifting should be balanced. Contractors should avoid liens on the property because they can cause delays and a decrease in profits among other things. Lien waivers eliminate this risk after contractors have made payments to subcontractors yet also ensure subcontractors will get paid in a timely fashion. In addition, subcontractors and contractors should agree on what is being released when utilizing partial waivers or releases.
5. Alternative Dispute Resolution (ADR)
It’s usually best to avoid litigation or at least to employ it as a last resort method of resolving your disputes. Both mediation and arbitration are effective ways to handle disputes. Incorporating an ADR clause into your contract is a fast and inexpensive way to resolve construction disagreements. Don’t leave you your contract to chance and contact a Bradenton construction lawyer to review all of your legal documents before you sign them.
To request a consultation with one of our experienced Bradenton contractor lawyers, please call us today at 813.579.3278 or submit our contact request form.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.