The simple answer is “Of course not!”. But are you taking any precautions to make sure that it doesn’t happen to you? How can this happen? We’ve all heard the stories of a subcontractor that failed to pay its laborers prevailing wages on a Davis Bacon project. Typically, the Department of Labor catches this failure to properly pay employees in an audit of the project. If the subcontractor doesn’t have [...]
What is a subcontractor to do when the owner has demanded additional work, but has refused to pay for it? Typically, a subcontractor cannot sue the owner because the subcontractor doesn’t have a contract with the owner. Perhaps the subcontractor and general contractor should enter into a liquidating agreement through which the general contractor can pursue the claim on the subcontractor’s behalf. Liquidating agreements bridge the privity gap between owners [...]
Every contractor has a form subcontract. But, how long has it been since you reviewed your form? Has it been cobbled together over the past few years? Like the tools in your toolbox, maybe it’s time to review your subcontractor agreement to see if it still works. Subcontracts can range from a single page to several pages and can include any number of clauses. Here are some clauses that [...]
In last week’s post, I mentioned that there were a number of terms that you could incorporate into your bid to defend against contractor claims should the project not work out. One contractor in Florida tried this, but the Court found that the subcontractor’s bid terms did not create a contract with the general contractor. In West Construction v. Florida Blacktop, the subcontractor’s bid contained a clause stating that if [...]
You know the drill – you learn about a project and you submit a bid. The bid is usually your own form, setting forth cost of materials and labor, and your contact information. This bid is an opportunity for you to incorporate some terms to improve your bargaining position with the general contractor. Some terms to consider are: Void Date. You could make your bid void unless it is accepted, [...]
More contractors and subcontractors are having trouble getting paid for their work. While an owner losing financing is nothing new, subcontractors are more and more finding pay-if-paid clauses in their contracts that arguably prevent them from pursing the general contractor for payment. What can you do to minimize this risk? Read Your Contract I know this sounds obvious, but pay-if-paid clauses can get stuck deep in the contract. And, after [...]
