Does signing your general contractor's construction contracts make you feel like you're stepping off of a cliff??

Unfortunately, signing construction contracts is a necessary "evil" for almost all construction contractors ... Even more unfortunate is the fact that many construction contracts issued by general contractors are extremely risky to subcontractors.

This section of our site serves to highlight some of the dangerous clauses that subcontractors accept in their construction contracts, often without even realizing what they've put at risk.

THIS ARTICLE IS A GREAT BEGINNING SAFETY NET. READ AND LEARN FROM THE NIGHTMARES OF OTHERS!

Currently, construction contracts are required when the work is over $500 (in California). Signing a contract issued by a general contractor without reading and understanding it first can be risky.

You must read the entire construction contract before you sign it. If you do not read, and understand, the contract before you sign it you could be putting your entire company (as well as your personal possessions, home, etc.) at risk, without even knowing that you have.

I wish that I could tell you that all contracts are created equal and that all contracts protect the subcontractor as much as they protect the general contractor, but unfortunately that is not the case.

I have seen so many different contracts out there, some that are very simple and many that are extremely complex.

I received a contract from one company that was so 'out there' that I put it in front of my attorney to review for me. She told me that this particular contract was one of the harshest contracts she has ever seen (meaning: I would be at great risk if I signed it as is).

So, I contacted the general contractor and requested that either a) they modify the contract as specified or b) they contract with me via my proposal form.

Of course they were offended and decided that they did not want to hire me to do the project so they called the next lowest bidder and asked if that bidder would do the project at my price!

That bidder told the general contractor no way, so they ended up agreeing to contract with me via my proposal.

As it turned out, the project was an absolute nightmare (the superintendent couldn't manage a self-contained ant farm, let alone a jobsite!) and the only thing that saved me from having to put out extra money that I should not have to put out (because the super was too busy chasing ants to make sure the job was being run properly), was the fact that I did not sign their contract, they signed my proposal.

Be aware that when and if you request changes to the contract, the general may refuse and then it is up to you to decide if you want to sign the contract as is or not.

There have been jobs that I did not take because the general would not make changes that I requested, but there have also been several contracts I've accepted even when the general would not make the changes (many times we base our decision on how much we stand to lose if the general chooses to enforce the unfair clause)....

Now please keep in mind, we are not attorneys nor do we have any legal training whatsoever, everything we include here is strictly examples based upon our and other contractors actual experiences. Please speak with an attorney to make sure the construction contract that has been issued to you is acceptable and worded properly.

Construction Contracts Continued on Page 2