Early Action on Your Construction Contract is Key

ONE OF ONLY A FEW CONSTRUCTION PROJECTS COMPLE...

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I bang the drum of early and frequent consultation with one of us construction attorneys on a regular basis here at Musings and in other places of the “blawgosphere.”

Why do I do this? Doesn’t such consultation help to avoid the problems that seem to make those of us in the construction law business happy? Aren’t all of us lawyers just out to complicate things and throw a monkey wrench into construction projects? In short, why would I constantly advise on ways to avoid exactly the construction litigation that you would think would make me the most money?

The answer? Because I think that the best way to keep my construction industry clients happy and profitable is to help them at least plan and contract in a way that avoids the legal pitfalls (if not the on the job glitches) that can cause unanticipated drain on the finances of a business. I also think that when working in partnership with my clients, I as a construction attorney can actually be a help rather than a hindrance. Frankly, while I can and do litigate on a regular basis, I would much rather help contractors and subcontractors stay profitable (read “out of trouble”) than spend my time and their money in court.

One way to help is for me to get involved early in the construction process. As my good friend Brett Marston recently posted, careful review of your contracts prior to signing can help you avoid certain issues down the road. Among those key items that Brett brings up is waiver of mechanic’s lien rights. A consistent theme I hear from Virginia construction folks is that they don’t realize that in Virginia (unlike many states), mechanic’s lien rights are waivable by contract. Without an early review or consultation with an attorney, you, as a subcontractor, could unknowingly waive this powerful and key right and be left without a right to a lien should something go wrong in the payment stream.

This is just one of many contractual and legal issues that you could avoid simply by taking an early and detailed look at your construction contract, preferably with the help of an experienced attorney and counselor at law.

As always, I welcome your comments below. Please subscribe to keep up with this and other Construction Law Musings.

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5 Responses to Early Action on Your Construction Contract is Key
  1. Scott Wolfe
    Twitter:
    September 26, 2014 | 9:28 AM

    Chris – Nice article, as usual. Thanks for the shout out, although I don’t think lawyers are ONLY out to complicate things :). Nor, are they purposefully out to complicate things.

    Early action on construction contracts is key, as you put forth in this article. And, in a perfect world, attorneys would be retained to review all contracts. I always challenge attorneys, however, to think about the challenge businesses face in following this advice.

    We have one user of our platform, for example, that has over 10,000 contracts signed every month. How does this practically work for pre-attorney review?

    This particular client has an in-house system for review, and perhaps it is an unfair example because they have an in-house legal team, groups of people trained to spot contract issues, etc. The real problem likely falls someone in the middle of the guy with one contract per month and this user.

    All that aside, it is unequivocally true that pre-review by an attorney may save a party huge headache and expense in the future. And thus, there is some disconnect, where pre-review is clearly a good idea yet not an idea that seems worth it in the eyes of the public…

    I don’t know why this is exactly, and I don’t know how to bridge the gap.

  2. Christopher G. Hill
    Twitter:
    September 26, 2014 | 9:38 AM

    Thanks as always for checking in Scott. I understand that you, as an attorney yourself, don’t see all of us as complicating factors.

    I agree, your one client described above is not the best example, though I think that the fact that they have their own legal team speaks volumes!

    On the other question, on bridging the gap. I think that it can and should be bridged. I am “in house counsel” of sorts to many local construction companies and hope that I’m helpful. Also, once the first several contracts are reviewed, I have found that the client’s learn to spot the big stuff and ask when there is something that seems off, thus controlling the cost. Flat fees for certain work can help too.

    In the end it is just teaching folks that a relatively small bill now could save a huge one later.
    Christopher G. Hill recently posted..Just Because Your Employee Was Supposed to Work Safely. . .My Profile

  3. […] contractor, have taken early advantage of the services of a construction lawyer and have carefully reviewed your contract for issues before signing that […]

  4. […] contractor, have taken early advantage of the services of a construction lawyer and have carefully reviewed your contract for issues before signing that […]

  5. […] it comes to negotiations and the fact that subcontractors often don’t read their contracts or discuss them with a construction attorney prior to signing them. I hear this first of his arguments often when I am reviewing a contract […]

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About Musings

I am a construction lawyer in Richmond, Virginia, a LEED AP, and have been nominated by my peers to Virginia's Legal Elite in Construction Law on multiple occasions. I provide advice and assistance with mechanic's liens, contract review and consulting, occupational safety issues (VOSH and OSHA), and risk management for construction professionals.

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