Why Subcontractors Must Negotiate Contracts

As a subcontractor, you play an important role in any construction project. However, all too often, subcontractors and material suppliers don't get the recognition and respect they deserve. In fact, some general contractors (GCs) may require subcontractors to enter contracts where the sub accepts most-or even all-of the liability when things go wrong.

This is why subcontractors must negotiate contracts to ensure they don't inadvertently sign away their rights or agree to terms that are virtually impossible for them to meet. Many contracts are replete with so-called "killer clauses" that can break a subcontractor's company in no time.

All subcontractors should work with an experienced construction law attorney to negotiate contracts and enforce their terms.

Avoid Killer Clauses

As a sub, one thing you don't want to do is set yourself up for failure by agreeing to contractual terms that:

1. 1. You don't even know about, simply because you haven't seen the prime contract
   2. You have neither the resources nor the legal requirements to fulfill

Review the prime contract with your attorney and make sure you fully understand each provision as it relates to your roles and responsibilities. If the contract is asking too much of you or the GC appears to be assigning unjust liability to you, your construction law attorney needs to be assertive in negotiating more favorable terms on your behalf.

Protect Your Interests

In the contract, the GC may require you to provide "all things necessary" and "assume all obligations, risks, and responsibilities." There may also be other provisions in there that essentially put you on the hook for things beyond your scope or control.

The law is actually on your side when it comes to protecting you from undue and unnecessary risk, and an experienced construction law attorney can assert those laws when advocating for you and negotiating on your behalf.

Your top priority in negotiating your contract is to protect your interests. You want to include clauses that:

• • Ensure you receive timely payment for your work, regardless of whether the GC has been paid

• • Limit your liability to only those things directly related to your work

You shouldn't be responsible for third-party negligence, for instance, or even compliance issues, cost overruns, and delays that are not your fault.

Have the Right Attitude

Head into your construction contract negotiations with the right attitude. If you believe going in that you won't get anything, then that's what you're likely to get-nothing.

Instead, believe in your own worth as a construction professional and recognize your role in the project. You may have to remind the GC and Owner of your role, and that's okay.

Emalfarb Law Can Help

Contact the national construction law team at Emalfarb Law today to find out how we can help you negotiate a fair contract that doesn't set you up for failure. Use our online consultation reservation form to schedule a confidential consultation. This will give us the detailed information we need to serve you better.

For more detailed information on things you should consider before entering contracts with GCs, please view Emalfarb Law's webinar on Avoiding One-Sided Contracts.