At Cotney Construction Law we take professional relationships in the construction industry serious. Many disputes can be avoided when agreements are entered with forethought. This is why we’re providing you with this two-part article series. In Part 1, we gave you a basic understanding of the contractor and subcontractor relationship. In this second part, we’ll discuss the subcontractor contract and compliance.
One of the most important aspects of forming a business relationship is drafting contracts. It can determine the success and failure of a construction project. A contract between both parties should address the legalities labor, materials, pricing, and warranties. The contract must benefit both parties, this will eliminate misunderstandings and disputes. When in doubt, let a construction attorney in Orlando review or draft your contract to ensure the interests and investments of both parties are secure. Following are some of the key elements that should be addressed, especially on the behalf of the subcontractor:
- Avoid vague contract language
- Specify the work a subcontractor is and isn’t responsible for
- Address losses and recovery will be handled in case of an unexpected termination
- How will payments be handled to avoid a mechanic’s lien
- Know what constitutes a default and be sure there’s opportunity to correct the default
- Address how potential disputes will be handled
Pay Attention to Compliance
One of the best ways to ensure compliance is to set up a system for continuous monitoring. It’s a good idea to prequalify your subcontractors to verify whether they are licensed, bonded, and insured. This includes workers’ compensation and liability insurance. In addition to that, signing lien waivers and performing periodic audits is vital. On another note, the client (the owner) should always know that subcontractors are working on a project. Finally, accurately recording and reporting labor time and completing safety training programs are crucial.
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.