Here at Construction Law Musings, we beat the constant drum that “the contract is king” and “draft a good and well-worded construction contract” consistently. As a Virginia construction attorney, I stand by these statements and fully endorse a well-written construction contract. Such a contract will set expectations and provide the rules for your deal (particularly in the commercial context). Without this solid foundation (yes, I see the potential construction pun), when there are issues on the job site, there will be no baseline for how to resolve those issues.
That said, I am also reminded on an almost daily basis that humans interact with these contracts. People negotiate the contracts and are the main forces that drive the success (or failure) of the construction project. Money is involved (often a lot of it) and there can at times be temptations to try and squeeze one last dollar out of the job despite what the contract says. Even the strongest contract cannot act as real-time protection against one party that refuses to comply with the contract and its performance or payment terms.
In this way, when you are entering a construction contract, whether as an owner, general contractor, or subcontractor, be sure to use your instincts. If you are negotiating with another party and your “spidey sense” tells you to walk away before it’s too late, you should at the very least consider why the hair on your neck is standing up. If this happens, be sure to weigh that feeling when deciding price terms or indemnification (for instance). If you’re getting a bad feeling, you may want to hold a harder line on certain terms, seek a higher price, or walk away. Ultimately this decision will be a business one based upon your experience, instincts, and other non-legal factors.
In short, don’t ignore the guy on your shoulder saying “Be careful.” Doing so could save you from a bad project that costs more than simply walking away.
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