When the time comes to sign your next construction contract, are you taking the time to actually read the ENTIRE contract? If you answered “no” to that question, don’t worry. You’re not in the minority. There are two main reasons why subcontractors don’t review their contracts:
- They’ve hired a Denver contractor lawyer to review it for them
If you’re having contract-related issues, and you didn’t hire the Denver contractor lawyers from Cotney Construction Law to review your contracts, then there’s a very good chance that you’re being negligent. This negligence can lead to significant issues for your business in the future, including loss of license, stop-work orders, and even bankruptcy.
As we discussed in part one of this two-part series, unrequited trust and the inability to read and process a lengthy contract are two common reasons why subcontractors hire a lawyer to review contracts in Denver. Now, we will discuss three more reasons why subcontractors should hire a lawyer to review all of their contracts.
3. Indemnification Clauses
In the context of a construction project, which includes countless moving parts, determining liability for an error can be an arduous process. As a subcontractor, you don’t want to accept responsibility for things that are ultimately the general contractor’s problem. Unfortunately, indemnification clauses within a contract can have a significant effect on the party that is deemed responsible for any defects or errors that have popped up during the project timeline. When a Denver contractor attorney reviews a contract, they will check to see if the subcontractor is waiving their protections against potential shifts in costs. If they determine that this is the case, they can provide an updated draft of the contract with fair indemnification clauses to help you avoid undue (or unjust) liability.
4. Dispute Resolution
Another important and often overlooked contract-related issue involves the presence, or lack thereof, of a clearly detailed dispute resolution process. As a subcontractor, you’re no stranger to disputes, and you’ve likely seen firsthand that the way you settle a dispute can have a tremendous effect on your professional relationships and profitability. If your contract stipulates that all disputes must be handled in a court of law, you may want to consult a Denver contractor attorney to see if an alternative dispute resolution clause can be added to your contract. When disputes are settled through processes like mediation or arbitration, it takes a lesser toll on the success of the project overall.
5. Liens: A Clause for Alarm
If our attorneys that review construction contracts in Denver were to recommend one primary takeaway from this two-part article, it would likely be this: never waive your lien rights. A contract with a no lien clause should present an enormous red flag to a subcontractor. The mechanics’ lien is your last line of defense against nonpayment, and it’s not worth working with a contractor that wants to strip you of this right.
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.