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'If You Can't Convince Them, Confuse Them'

Cliff Ennico on

"I run a small contracting business. I have been hired as a subcontractor on a large construction project -- a 40-story downtown office building.

I am told there are more than 70 different contractors who will be working on this project. My company will be responsible for only a small piece of it.

The subcontract they want me to sign is ridiculous. Among other things:

-- They want me to give an unlimited indemnity for anything that goes wrong with my work. So even though I am being paid only $10,000, I could potentially be on the hook for millions of dollars.

-- The contract says they don't have to pay me if my work is delayed for any reason, no matter how short the delay and even if the delay is not my fault (for example, if other contractors don't complete their work on time or if a supplier delivers materials late to me).

-- They want to hold back 20% of my fees until they are completely satisfied with my work, which might be months after the project is finished.

 

I've asked the general contractor to change some of this language, but he says he can't spend the time negotiating 70 different contracts with 70 different contractors. Everybody, in his opinion, has to sign exactly the same contract.

I've never worked with this contractor before. What can I do to avoid being nailed to the wall if things don't go 100% perfectly with this job?"

It's no secret that the construction business is a brutal one, especially for small contractors. The provisions you describe in the subcontract are truly unreasonable. Any attorney would insist on negotiating these so they are more in your favor.

Having said that, I can also understand a general contractor's not wanting to spend hours of legal time negotiating contracts with 70 different subcontractors, and having to keep track of them afterward. Remember that the general contractor is accountable to the owner of the project, the architect and other professionals, and even a small delay from a small contractor could cause him to be in default under his main contract, with who knows what consequences and penalties.

...continued

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