10 Ways Contractors Leave Money on the Table
It may be hard to admit, but most construction companies are leaving money on the table in some way on almost all of their jobs. It doesn’t matter if your...
Back Charges
This is the main page for articles about back charges in construction. Back charges are amounts held back or charged back to a contractor on a construction project. In a typical scenario, payment due to a contractor is reduced because of an allegation that the contractor did not perform the work correctly or completely. For example, a contractor may agree to perform work for $100,000. During or after work, the general contractor or owner may contend that $20,000 of the work is incorrect or incomplete. In that case, the contractor’s payment is reduced from $100,000 to $80,000 (=$100k – $20k).
It’s common for “back charges” to be the source of disputes, delays, and problems on construction jobs. It’s also common for general contractors and owners to use “back charges” as leverage against subcontractors to force them to perform work that is out of scope, or to make other change orders or change directives in the work. Even when back charges are claimed and there is a dispute, contractors and subcontractors have the right to assert a claim (i.e. a mechanics lien) for the full value of the work that they contend to be due.
If you need help with back charges in construction, browse the articles below. If you can’t find what you’re looking for, you can refer to the Expert Center page for back charges for more information. The Expert Center is a question/answer platform that connects construction attorneys and contractors. You can either browse the questions that other contractors have asked or ask a question yourself for free.
Most Recent Posts on Back Charges
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How smart contractors avoid back charges and get paid
Back charges can be a scary part of the construction business. They’re often abused or misused and subcontractors can find themselves with their backs against the wall out of nowhere....
Scope Creep | How to Keep the Scope of Work Under Control
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The Right to Cure | Resolving Disputes Without Claims or Legal Action
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Termination for Cause | When Can Construction Contracts Be Terminated for Cause?
It might be tempting to fire a contractor or sub who's underperforming, but termination can be a tricky topic - particularly termination for cause.
Consequential Damages Can Create Extensive Liability for Construction Businesses
Left unchecked, consequential damages could create extensive liability for construction businesses. Construction contracts should limit or at least clarify them, when possible.
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Construction delays are one of the most common disputes that arise on projects. However, the process of establishing and proving a delay claim can get complicated quickly. That’s why having...