The construction contract. Ah, how we love thee, yes?
The construction contract is a critical component to every construction project. Sometimes, unfortunately, it’s a huge document poured over by attorney after attorney, containing clauses that are legal battlegrounds in themselves.
Popular clauses like “pay when paid” or “pay if paid” clauses are well known throughout the industry, but subjected to varying levels of scrutiny across the states such that it’s nearly impossible to know exactly what law applies to you without being an attorney fairly seasoned in construction law issues. Hell, I just learned yesterday that “Pay if paid” clauses are completely null and void in the state of New York, and I’m an expert in this stuff (thanks @KushnickPallaci).
Well, with that said, let me introduce you to Wally Zimolong and his “Supplemental Conductions” blog. Earlier this year Wally did a blog series on the construction contract focusing on the “7 clauses that most often lead to litigation.”
I find this to be a very good approach. While a construction contract can be complex, lengthy and generally a beast of a document, most disputes boil down to the same ol’ caca. Wally’s guide to these 7 clauses is an excellent read and very helpful to anyone in the construction industry.
While this guide is useful to construction attorneys, it’s also extraordinarily useful to controllers, credit managers, small business owners, CFOs, CEOs, project managers, etc. Why should these people be educated on these controversial contractor clauses?
A few months ago a friend of mine (Andrew Legrand) wrote an article for Startup companies about drafting a contract and pointed those startups to the best resource to write these contracts: Themselves. (The Best Place For Free, Customized Contracts).
I love this article because it highlights an inalienable truth about contracting at any level: The parties to the contract know the deal best. Yes, even better than their attorneys. Plus, once the deal is put together it is the parties who must follow the terms of the agreement. The parties must be very in-tune to the agreement terms.
If you’re wondering what any of this contract talk has to do with mechanic liens, look no further than some previous posts on this blog. The terms of your contract can have a huge impact on your mechanics lien rights. One primary example is this: Can Pay When Paid Clauses Destroy Your Mechanics Lien or Bond Claim Rights?