Many contractors repeatedly make the same mistakes in negotiating contracts. Here are the most common mistakes contractors make—and how they can be avoided.
1. Not Being Careful With Force Majeure Clauses
To protect themselves from liability in the event of unforeseen circumstances like fires, floods, wars, unusual delays in deliveries, strikes, pandemics or acts of God, contractors should ensure their contracts contain robust force majeure provisions. These provisions state that in the event of any extenuating circumstances outside of its control, the contractor is not liable for any damages that result from a delay to the project completion date and is entitled to a time extension. This clause has been critical in addressing COVID-19-related disruptions and the current material shortages. Contractors should be wary, however, of “no damage-for-delay” language, which often appears in conjunction with these clauses.
Reprinted courtesy of Jonathan A. Cass, Nicholas F. Morello and John A. Greenhall, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Mr. Cass may be contacted at firstname.lastname@example.org
Mr. Greenhall may be contacted at email@example.com
Mr. Morello may be contacted at firstname.lastname@example.org