Home>Levelset Community>Legal Help>What is the best practice to review owner contracts?

What is the best practice to review owner contracts?

We're a national general contractor and frequently get owner contracts that need to be reviewed. What are the best practices advice for reviewing and executing these contracts? Typically, the estimating group will get a sample contract at the time of the bid. The final comes to us after the job is awarded. We need to compare all kinds of things at that time, such as the bid documents, drawings, qualifications, etc. All of this stuff is usually done by the estimating group. However, what about the owner contract itself? Is this a CFO function? The President/CEO function? Should companies have a contract administrator in-house to review these contracts? Do companies typically have an in-house attorney, or get these things reviewed by outside counsel, etc?

2 replies

Oct 7, 2019

This is a great question and something most contractors don't think about enough. Absolutely someone should be reviewing the owner contract and making a checklist of the requirements for the different players within your organization. There should be a checklist for what documents/information are required to be submitted with pay applications (e.g. lien waivers from subs, affidavits, etc...) There should be a checklist for project managers of who needs to be contacted and what happens in the event of hidden conditions or questions about engineering. There should also be a checklist of what subcontractors need to have, since many owner contracts place additional requirements on subcontractors that may not be included in the contract between you and your sub. One of the most common problems I see is a GC who was "doing good work" get terminated off a job or not paid in full because of some technical deficiency in the performance of the contract. You want to avoid that at all costs. In terms of who should be doing that review, it depends on your company. In my practice, I do this for some of my clients. Others have in-house counsel or experienced contract administrators who review these contracts. Depending on the size and volume of your company, it may make sense to have a couple of people review the contract. I may be biased, but I do think you should consult with an attorney regarding this. Even if you end up handling the review in-house, an attorney can help alert you to common contract provisions that cause problems and can help train your internal review team to keep an eye out.

1 person found this helpful

Helpful

May 7, 2023

When it comes to reviewing owner contracts, there are several best practices that can help ensure a smooth and successful process. One crucial aspect is to establish clear performance criteria and goals at the outset of the contract. This will allow for objective assessment of the owner's performance against agreed-upon metrics. Additionally, incorporating <a href="https://simbline.com/phrases/performance-review">performance feedback examples</a> can provide a useful framework for evaluating the owner's work and identifying areas for improvement or potential renegotiation. By implementing these best practices, owners and contractors can maintain open communication and achieve mutually beneficial outcomes throughout the duration of the contract.

Report Spam