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ConstructionPro Week, Volume: 2 - Issue: 9 - 03/01/2013

Do You Review Every Page of Every Document?

By Bruce Jervis

 

The document-intense nature of construction contracting places a burden on busy personnel. Page after page of material accompanies every transaction. And most projects necessitate multiple transactions.

 

Attention is naturally drawn to the heart of the deal: price, scope of work and schedule. Much of the rest may seem like “just boilerplate.” Adding to the complacency is the repetition of the language. Few industries use as many “standard” contract documents. But are they really standard? All documents are subject to modification.

 

In a worst-case scenario, parties agree to contract documents they have not even read. That happened recently when a contractor solicited price quotations from suppliers. A supplier responded with a 10-page proposal. The price was at the top of the ninth page. The 10th page was a set of terms and conditions. The contractor’s employee never got to the 10th page. An unfavorable term found there was enforceable against the contractor.

 

Does your organization review every page of every document? Is the review performed by someone with the knowledge and authority to detect and prevent possible problems? What do you consider “best practices” when it comes to understanding the terms of the contracts into which you enter? I welcome your comments.

 

COMMENTS

We are a small, specialty subcontractor. We look at every page of every document. We also try to incorporate an order of precedence among the documents so that our terms and conditions govern over all others. It is laborious, but I consider it money well spent if it is able to protect us in the proverbial "what if."
Posted by: Michelle Blocker - Friday, March 01, 2013 11:12 AM


A really BIG problem....... intentional fine print can hide the biggest risk to your business; any print not read will be the biggest risk to your business.


Posted by: Don Godi,FASLA, PLA, RCA#444 - Friday, March 01, 2013 11:16 AM


As a Construction Manager for a local government, and a former Contractor, it has been proven to me that many, if not most, Contractors DO NOT thoroughly read and understand the Contract Requirements before submitting a bid or proposal. To avoid the problems resulting from such lack of compliance, we have instituted a process of Post-Bid/Pre-Award qualification of the apparent low bidder. Time consuming, difficult, unpopular, but well worth the trouble.
Posted by: Gary Watson - Friday, March 01, 2013 11:21 AM


These days most important points are written in fine prints. If you don't read them then you end up paying or arguing in court. I rather spend an hour more to read than to skip. It improves my reading skills.
Posted by: Rashid Shaik - Friday, March 01, 2013 12:08 PM


As an architect and construction program manager for a university, I too know that most contractors do not seem to read the documents. However, it is very likely that even if documents are read, the production team they are passed off too after contracts are signed, including subcontractors, superintendents, etc. either do not read them, do not remember them due to the shear magnitude and complexity of the materials or do not fully understand the requirements. Our position has been to to address unusual language, changes and items of special interest in pre-bid conferences and in each meeting as the project progresses. We get better results in most cases from helping a GC avoid mistakes, complete jobs smoothly and make a fair profit. Proving them wrong or in violation after the fact only means we both have a problem to solve and/or fight over.
Posted by: Marshall Wilson - Friday, March 01, 2013 12:47 PM


We are mid-size general contractor with a significant amount of our work (98%) contracted with the federal government. Our Subcontract format is very long due to the legal constraints placed on us by state and federal law in addition to the litigious nature of the modern construction industry. Contrary to popular belief, these long contract documents are in place to protect the prime contractor AND the subcontractor' interests. When you establish an AGREEMENT between two entities it should be as well defined as possible. Instead of individuals in the industry complaining about the depth and breadth of these evolved documents the industry should take more time to educate subcontractors on responsible business practices to include reading and understanding subcontract agreements. These documents have not evolved to their current state solely for the purpose of misleading, duping or taking advantage of individuals with a short attention span rather they are the reaction to current trends and issues in the industry.
Posted by: Stephen Cervantes - Friday, March 01, 2013 4:51 PM


Presently, as Director of Construction and Campus Development for High Point University, I have made it a point of using my proprietary contract documents for any major or minor construction or renovation projects. This applies to any general contractor or subcontractor that we may hire. I have spent over 25 years in various sectors of the real estate development, construction and asset management industries and have read a tremendous amount of contracts and agreements of all forms and have always read every page. It was from this experience and realizing all the time I was spending looking at the nuances and language, written in all forms, in contracts that I realized that I needed to standardize a contract that I would use wherever I would be employed. Of course, with different employers, I would have to modify some specific language but the bolier plate and exhibits are all the same. Doing that has reduced my contract review time greatly and I also know that I have the protections needed in the contract.
Posted by: Ron Guerra - Monday, March 04, 2013 8:52 AM










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