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Thread: Contractor wants me to sign a contract, but it sounds like I can get screwed.

  1. #31
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    Quote Originally Posted by Sierrasparky View Post
    Why the heck would anyone sign such a BS clause. This contractor can always let you go and screw you from at least 10%.

    Don't most contractors charge at least 10% OH and another 10% profit at a minimum these days.
    In court it could easily be argued that the 10% is profit as the words say. Any overhead that can be justified can be also claimed. So I think it is pretty generous. Where you would have to watch out is where it said 10% profit and overhead.


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  2. #32
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    I get the impression that a lot of people here don't do standard commercial work with obvious exceptions. The wording you included is pretty standard wording. Do a Google search of AIA contract between Contractor and subcontractor and you will see that is pretty much so. I have signed dozens probably 200 or more contracts with similar wording.

    The part about "pay if paid" is disturbing but typical. The GC is generally protected better than the subs, sort of. But think about the big picture. If a GC doesn't get paid, do you really think he is going to pay you anyway? The law is just written this way. That is why the release of lien. It is why YOU need to file whatever they call it in your state, Mechnic's lien, intent to lien, Notice to Owner are three I know of all the same thing. Even if the Contractor gets paid and doesn't pay you, the owner of the property is still liable to pay you UNLESS you have signed a release that states "unconditionally" Note this is very different than a waiver that states "Upon payment..." The second one requires the owner to prove that payment was made.

    It is what it is. There are many things thrown in to a contract that I will line out, this isn't one. Here is something to be very aware of. Scope of work. Make sure they either directly acknowledge and include your proposal, or they use your inclusions/exclusions word for word. If they want to change that it will always cost them. #2, most contracts reference a schedule. Make sure that you either have a certified one that the contract is based on or that you note that it doesn't exist in the contract.


    I know what I don't know, and I know where to go to find it!

  3. #33
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    Quote Originally Posted by Strathead View Post
    I get the impression that a lot of people here don't do standard commercial work with obvious exceptions. The wording you included is pretty standard wording. Do a Google search of AIA contract between Contractor and subcontractor and you will see that is pretty much so. I have signed dozens probably 200 or more contracts with similar wording.

    The part about "pay if paid" is disturbing but typical. The GC is generally protected better than the subs, sort of. But think about the big picture. If a GC doesn't get paid, do you really think he is going to pay you anyway? The law is just written this way. That is why the release of lien. It is why YOU need to file whatever they call it in your state, Mechnic's lien, intent to lien, Notice to Owner are three I know of all the same thing. Even if the Contractor gets paid and doesn't pay you, the owner of the property is still liable to pay you UNLESS you have signed a release that states "unconditionally" Note this is very different than a waiver that states "Upon payment..." The second one requires the owner to prove that payment was made.

    It is what it is. There are many things thrown in to a contract that I will line out, this isn't one. Here is something to be very aware of. Scope of work. Make sure they either directly acknowledge and include your proposal, or they use your inclusions/exclusions word for word. If they want to change that it will always cost them. #2, most contracts reference a schedule. Make sure that you either have a certified one that the contract is based on or that you note that it doesn't exist in the contract.
    That's not necessarily true. It depends on which state you're in as I recall. Many states won't allow "pay if paid" clauses and limit the duration of "pay when paid" restrictions. After all, as a sub your contract is not with the owner, it's with the contractor.

  4. #34
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    Quote Originally Posted by Strathead View Post
    I get the impression that a lot of people here don't do standard commercial work with obvious exceptions. The wording you included is pretty standard wording. Do a Google search of AIA contract between Contractor and subcontractor and you will see that is pretty much so. I have signed dozens probably 200 or more contracts with similar wording.

    The part about "pay if paid" is disturbing but typical. The GC is generally protected better than the subs, sort of. But think about the big picture. If a GC doesn't get paid, do you really think he is going to pay you anyway? The law is just written this way. That is why the release of lien. It is why YOU need to file whatever they call it in your state, Mechnic's lien, intent to lien, Notice to Owner are three I know of all the same thing. Even if the Contractor gets paid and doesn't pay you, the owner of the property is still liable to pay you UNLESS you have signed a release that states "unconditionally" Note this is very different than a waiver that states "Upon payment..." The second one requires the owner to prove that payment was made.

    It is what it is. There are many things thrown in to a contract that I will line out, this isn't one. Here is something to be very aware of. Scope of work. Make sure they either directly acknowledge and include your proposal, or they use your inclusions/exclusions word for word. If they want to change that it will always cost them. #2, most contracts reference a schedule. Make sure that you either have a certified one that the contract is based on or that you note that it doesn't exist in the contract.
    Just because it maybe standard in a AIA contract so are other things like AAA arbitration.

    I've seen the paid when paid and Termination of convenience for years. I will negotiate them out or not do the work. The reason is because those contractors use this language as leverage to pay you pennies on the dollar.

    They use paid when paid to string you out well past the due date of payments. The do so to bully you. Either work for those who you know and trust or sign on to this garbage and roll the dice. It boils down to how much can you afford to loose.

  5. #35
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    Quote Originally Posted by Strathead View Post
    I get the impression that a lot of people here don't do standard commercial work with obvious exceptions. The wording you included is pretty standard wording. Do a Google search of AIA contract between Contractor and subcontractor and you will see that is pretty much so. I have signed dozens probably 200 or more contracts with similar wording.
    True, but not all of us accept those terms. I’ve always revised that to say net 30 from the monthly billing date as specified in the contract, or if necessary net 30 from the date pending approval from the architect, minus retainage.

    It has saved us more than once. I slipped up on a recent job and left the “pay when paid” for the final retainage; here we are 5 months later and just got the final $30k+ retainage check.


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