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

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I add amendments to any contracts that aren't agreeable to me. Then negotiate those amendments and either come to a mutual agreement or don't take the job. I would not take the job under this contract as written.
 
oscarcolumbo said:
Thanks for all of the advice, I have been reading all of your comments very carefully. What really bothers me is that I gave them the estimate for this job about three months ago and just last week they said they want to move forward with my estimate and want the job started tomorrow, Wednesday the 11th. They said they would write up a contract and send it to me and I only received this contract yesterday morning and now they are telling me to hurry and sign it and send it back to them. It seems like they just want me to sign it without reading it. So I'm taking my time and took at sharpie and blacked out some of the words like you guys said. This is a residential house remodel, they gutted the whole house, re framed it and are starting it new. The total cost I quoted was $ 9,393.90.
They also sent a Release and waiver of lien that they want me to sign. Don't I sign that AFTER the job is completed and they send me the final payment?
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Don't let them rush you into doing anything. As others have said, you can get a conditional lien release, but no final lien release until you are paid. This is no problem for a legitimate general contractor. It's everyday business.
 
Sierrasparky said:
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.
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So, let me think about this. He pays you up to 90% through final inspection, terminates the contract, turns it into cost plus with 10% max, and then runs you through the wringer to justify every box, screw, and switchplate, demanding all YOUR invoices and maybe demanding a rake back when you can't produce every sliver of paper. Thank you kindly, but I'd pass.
 
oscarcolumbo said:
Thanks for all of the advice, I have been reading all of your comments very carefully. What really bothers me is that I gave them the estimate for this job about three months ago and just last week they said they want to move forward with my estimate and want the job started tomorrow, Wednesday the 11th. They said they would write up a contract and send it to me and I only received this contract yesterday morning and now they are telling me to hurry and sign it and send it back to them. It seems like they just want me to sign it without reading it. So I'm taking my time and took at sharpie and blacked out some of the words like you guys said. This is a residential house remodel, they gutted the whole house, re framed it and are starting it new. The total cost I quoted was $ 9,393.90.
They also sent a Release and waiver of lien that they want me to sign. Don't I sign that AFTER the job is completed and they send me the final payment?
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no, you sign it AFTER the final check clears, including retention.

the ONLY way you will know how badly this will go, is to begin work.
if you want to save time, figure out how much the material will cost,
take that in cash, and set fire to it in the driveway. then, take the
time you figure it will take to do the job, and take a vacation with it.
take the cost of the vacation out of the pile on the driveway before you
torch it.

you will return home rested, and be in far better shape than if you did
the job.

here is what it is..... the OTHER guy they were attempting to sucker
walked. and they *do* want you to sign it without reading it.
 
Sierrasparky said:
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.
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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.
 
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.
 
Strathead said:
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.
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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.
 
Strathead said:
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.
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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.
 
Strathead said:
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.
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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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