Think those standard construction contracts you bought are enough to protect you in the event of a legal hubbub? They might not be. Read this cautionary tale to understand why.
One of my friends and fellow contractors recently won a large new construction job for a light commercial facility. This was a big break for him; his part of the country is experiencing a huge slump in construction and his company was running off of fumes and small jobs. He used his standard Prime Contract template for the deal, one that he had bought as part of a construction contract bundle and had used for many other jobs.
My friend has asked me not to go into detail because of pending legal issues, but a loophole in the contract is looking like it might cost him big time. He brought on a lawyer after the legal mess started and he saw the mistake in the contract as clear as day. He said it was a wonder the issue never came up on any of his previous jobs. Now his only hope is to minimize his losses.
The moral of the story? Have a lawyer read over your most important contracts. It’s a tough call to make; paying a lawyer to review a contract in this competitive of a market doesn’t seem to make sense, but it would have saved my friend a bundle.
I’ve determined that the best compromise is this: ask a lawyer if they have an approved set of construction contracts that you can purchase from them. Those who do will also be better able to modify them and defend you if necessary. This allows for a higher degree of protection than standard form templates while avoiding the very large cost of having a lawyer write a contract from scratch.
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