In situations where the client is a prime or sub contractor, it is challenging to sort through construction contracts to tease out provisions favorable, dis-favorable, pit falls or traps. If the following 15 provisions are bargained for or red lined into a Construction Contract a prime or sub contractor will be protected from most contractual pitfalls.
IN A NUTSHELL
The following “Nutshell” provision tries to incorporate the sum and substance of the heart of these provisions. If it can be added verbatim to a contract it will provide immense protection to a contractor from the worst contractual nightmares.
Not withstanding any of the forgoing and with the following controlling the foregoing, Contractor will not be liable for consequential or liquidated damages, Contractor’s liability for any damages or costs owed to the Owner/GC will be limited to Contractor’s available and collectible insurance. Contractor maintains comprehensive, industry-standard insurances with a financially responsible insurance company. Owner/GC may accept Contractor’s current insurance by accepting current certificates of insurance from Contractor or by permitting Contractor to begin or continue work at the project. Contractor will not be responsible for any other party’s Negligence except where Contractor expressly agreed to such responsibility involving its work, subcontractors or vendors and only to the limits of its available and collectible insurance.
LINE ITEMS
- CONTRACTOR will not be liable for consequential or liquidated damages.
- CONTRACTOR’S liability for any damages or costs to the Owner/GC will be limited to Contractor’s available and collectible insurance.
- If CONTRACTOR’S disputes a claim that it is responsible to the Owner/GC for damages or costs, payment to the Owner/GC will not be made “upon demand”.
- Change orders /overtime shall include 10% overhead and 15% profit.
- The contract shall be controlled by the laws of the State of New York. Disputes will be resolved in the State of New York.
- Nothing in this contract, such as paid-when-paid or condition-precedent language, will shift the risk of non-payment from the GC to CONTRACTOR .
- Any lien waiver request will be a conditional lien waiver which only takes effect once the amount that is the subject of the lien waiver is paid. Lien rights provided under New York law will not be impaired in situations caused by acts of the Owner or GC.
- CONTRACTOR maintains comprehensive, industry-standard insurances with the a financially responsible insurance company. Owner/GC may accept CONTRACTOR’S current insurance by accepting current certificates of insurance from CONTRACTOR.
- If the job is terminated for convenience CONTRACTOR shall be entitled to reasonable demobilization costs and for the unpaid costs of job-specific materials.
- CONTRACTOR shall have such rights against the GC as the GC has against the Owner. The GC/Owner contract will apply to CONTRACTOR only to extent of CONTRACTOR’S work at the job site, and will not replace the GC and CONTRACTOR’S agreements regarding insurance, indemnity, payments, warranties, extras, time to perform, suspension or termination of contract, claims and dispute resolution.
- CONTRACTOR will not be responsible for any other part’s Negligence except where CONTRACTOR expressly agrees to such responsibility involving its work, subcontractors or vendors and only to the limits of its available and collectible insurance.
- In the event of early occupancy or use, CONTRACTOR’S liabilities are limited to incomplete portions of CONTRACTOR’S work.
- Payment may be withheld only to the proportionate extent of disputed work. Otherwise CONTRACTOR has the right to terminate for convenience.
- CONTRACTOR may be entitled to damages for delay in situations caused by the Owner or GC’s fraud, bad faith, active interference, gross negligence, or abandonment of the contract.