A Few Tips to Help You With Contract Negotiation Part 1
As Lakeland construction attorneys, we understand how competitive and risky the construction environment can be. We also know that many contractors may shy away from negotiating a contract in fear of losing out on a coveted project. This doesn’t have to be the case. This two-part article will cover basic negotiating tips to help you secure a contract that protects you and balances risk. Visit Part 2 to learn more.
Focus On the Bottom Line
There are many things that can be changed in a contract but it’s important to focus on factors that:
- Impact your payment
- Impact your job performance
- Affect the Scope of Work
- May increase claims on your project
Address Critical Provisions
This ties into thinking from the perspective of each professional. Some of the critical clauses you’ll want to think about include:
- Site conditions
- Liquidated damages
- Change orders
- Contract Terminations
Perspective is Key
Contracts should be drafted with the perspectives of the owner, contractor, and the subcontractor in mind. Owners will generally want to shift more risk downstream whereas contractors will want to limit their exposure to risk. If not careful, subcontractors can end up carrying more risk simply because they don’t want to miss out on a good project opportunity. This perspective of each professional is valid. The key to successful negotiation is to work out a deal that balances the risk among the parties based on their roles and levels of responsibility.
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.