
Subcontractors understandably become impatient waiting for the Owner process to play out and attempt to avoid the Owner disputes process altogether.
Because general contractors have direct contracts with their subcontractors, without proper contract clauses in place in the subcontract itself, general contractors can face unnecessary exposure to their subcontractors for claims that are the result of Owner caused issues. For this reason, a properly drafted subcontract should contain a disputes clause that clearly binds the subcontractor to the process, timing and results of the prime contract’s disputes provision for any subcontractor claim(s) that the general contractor deems to be an owner caused issue (pass-through claims). In this manner, the general contractor protects itself from having to potentially fund out of its own pocket subcontractor claim requests relating to Owner caused issues while the subcontractor’s claims are still pending or being resolved upstream with the Owner.
Mr. Cohen may be contacted at bruce.cohen@acslawyers.com