Subcontractors who win a bid with a general contractor need to take a close look at the contract that the general contractor sends them before signing it. These contracts are some of the most one-sided and unfair agreements that we see in any context. The contracts are written by the general contractor and are entirely for the benefit of the general contractor. While you may think it is a form contract, often it is not.
The majority of contracts that we review on behalf of our subcontractor clients take away subcontractor rights that are required by law and put the entire risk of nonpayment onto the subcontractor. Too often subcontractors sign these contracts without understanding them and then are shocked to find out that they don’t have the right to stop work even if they aren’t getting paid!
On all jobs the best practice is to have an attorney review your contracts and negotiate some of the basic terms so that you end up with a fair contract. While it is understandable that some subcontractors don’t think they have the negotiating power or leverage to ask the general contractor to make changes to their contract, in our experience the general contractor is often willing to compromise on the terms to reach a more balanced contract. General contractors who are unwilling to negotiate fair terms may be positioning themselves to negotiate down your payment after the work is done. If they are unwilling to agree to reasonable terms before the work is done, you should carefully consider whether you wish to do business with them. The bottom line is that subcontractors should not be afraid to negotiate their contracts. As the saying goes, you will never get what you don’t ask for.
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