New Preditory terms

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Sierrasparky

Sierrasparky

Senior Member
Location
USA
Occupation
Electrician ,contractor
Has anyone seen some of these new Subcontractor agrrements that have caluses Like:
" Termination For Convenience"
1) Owner may terminate this contract for its convenience.
2) Subcontractor will get paid for work done to date plus a flat percentage for Profit and overhead of 10% ( most contracts are at least 10 and 10)
3) Subcontractor has no rights to recover damages for lost profits or ovehead.

Or

Termination:
If subcontractor Fails to perform Contractor may give written notice of tremination and after 24 hours Seize all Materials, Tools, Machinery under the control of the Subcontractor and Hire his own Labor to complete the work..........

Who signs these contracts.
People are asking to get screwed. The problem I see is this type of of contract legal. It's so predetory and one sided.
I use them for the wood stove Fire starter on a cold morning.
 
I found this one that I could copy and paste.

4. Default: In the event that Subcontractor appears likely to be unable to complete the work on schedule, or if Subcontractor fails to fully perform its duties under this Subcontract, or if Subcontractor becomes insolvent, or fails to supply sufficient forces to maintain theschedule, or is guilty of any other default under this Subcontract, then Contractor may
(a) withhold payment for work performed under this Subcontract or withhold payment of any other obligation of Contractor to Subcontractor,
b) after giving 24 hours written notice to Subcontractor, eject Subcontractor and take over Subcontractor's work and terminate Subcontractor's right to perform under the Subcontract. If Contractor takes over Subcontractor's work, then Contractor will charge Subcontractor for all costs incurred as a
result, including reasonable overhead and profit and including attorney's fees and other expenses. If the total amount exceeds the unpaid balance of the Subcontract, then Subcontractor shall pay the difference to Contractor. If the amount is less than the unpaid balance of the Subcontract, the excess shall be paid by Contractor to Subcontractor. If Contractor takes over Subcontractor's work, Subcontractor shall permit Contractor to take posession of all materials, equipment, tools and appliances at the job site for the purpose of completing Subcontractor's work. Subcontractor will cooperate with Contractor to facilitate an orderly takeover

Use of the word Appears is very subjective. I think a stern warning is in order not what I have seen.
I have personally seen Owners throw somone off the job for now reason,and complete the job with a personal friend and then not pay what was due for the work done by the first guy.
 
Sierrasparky said:
I have personally seen Owners throw somone off the job for now reason,and complete the job with a personal friend and then not pay what was due for the work done by the first guy.
Click to expand...

That's what we call a " Dead Beat ".

" Termination for convenience " is more complicated than that. The sub doesn't just get run off the job. He gets to collect for work that is completed and 10% of the remaining contract amount ( 10% isn't that bad for work that you are not even required to do ).

It's my understanding that there are down sides even for the owner or GC when trying to use this clause. It's much better to terminate for cause.

I think it's just one of those deals where the lawyers get rich while everyone else gets screwed.
 
Terms of service

Terms of service

Although this would not work for large jobs; It seems the trend to counter such contracts is to have a default Terms of Service for service calls, change orders, extra work.
As soon as anything is different than what you bid it defaults to the terms of service.
Think Electric has a Terms of Service that anyone may re use or modify for doing service call, repair and remodel work.
It has a flat hourly rate for labor and a up to 60% mark up on materials & rentals.
A no time line clause.
But a no obligation clause, either party can walk at any time.

It is nice to see other contractors who can read and not so hungry they will sign anything.
 
Tortuga
"Although this would not work for large jobs; It seems the trend to counter such contracts is to have a default Terms of Service for service calls, change orders, extra work."

These terms were found on Multi muillion dollar contracts what do you believe a big contract is? or were you reffering to your Terms.


growler:
The EC does not pass go and collect 200.00 .Where is it that you think that the EC gets to collect 10% for work they did not provide.
Most of these contracts I have seen specify no rights to recove lost profit or Overhead. The subs get thrown off the job and get threatened with I'll charge back what my guy charges. The sub may be left with more money he has to pay the owner than he has owed on work done. What happens is that The sub presents billing for the work done, they give him the wages and direct lablor cost( comp and Taxes) he paid staff and 10% . For most that is much less than what they bid the project for. would you work for this..
Am I missing something ....

Terms like those have no place in an honest contract. They are one sided. They serve one purpose " to bully the Sub"

I think you are viewing this from the wrong side.

Would you work for change orders at only 10%? I hear all the time "i give them a cheap price and make it up by changes. At 10% I bet you'l make millions.




I had a guy try to bully and push me off the job because he did not like me. He threatened me about getting another sub to replace me but I stood my ground. He wanted changes but would not sign for changes, He'd point I want this and that , I'd hand him a change order He'd throw it in my face..
It got rediculous.. To walk I would have had to sue for any money as he would not discuss any type of seperation. I was lucky he ad my contract and terms not like those I had shown
 
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Sierrasparky said:
Tortuga
"Although this would not work for large jobs; It seems the trend to counter such contracts is to have a default Terms of Service for service calls, change orders, extra work."

These terms were found on Multi muillion dollar contracts what do you believe a big contract is? or were you reffering to your Terms.
Click to expand...
I was referring to our terms.
 
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