Construction contracts are complicated documents that try to balance the needs of many different parties involved in a project. Contractors face much uncertainty when delivering on their contract responsibilities, so it is important to design contracts that are fair in allocating risk.
While every clause in a construction contract is important to review, there are some that deserve closer scrutiny. The following top contract provisions to be negotiated with the owner are ones that legal professionals consistently point to as needing special attention.
There is always the possibility something is going to happen that will cause a delay in project activities. When these delays are out of the contractor’s control, they are called “force majeure” and include things like material shortages, labor disputes, actions on the parts of government agencies, and delays by other project participants such as the owner, architect, or engineer. In these situations, the contractor needs to be compensated for damages arising from these delays. Contractors will often have additional costs, see material prices increase, and end up with higher overhead costs.