Every subcontract you’re handed is written by the general contractor’s lawyers to protect the GC, not you. The language that sounds reasonable often contains traps that can cost you thousands or destroy your lien rights entirely.
After reviewing thousands of subcontracts and filing hundreds of mechanic’s lien lawsuits, we know exactly how GCs use contract language to shift risk and avoid payment. Most subcontractors sign these agreements without understanding what they’re actually agreeing to.
But here’s what many don’t realize: you don’t always have to work under their terms. Smart contractors are taking control through professional construction contract creation for direct owner work, specialty projects, and repeat client relationships.
What it sounds like: “We’ll pay you when the owner pays us.”
What it really means: The GC can use your money as their operating capital indefinitely. If the owner doesn’t pay, you don’t get paid – even if you completed your work perfectly.
The real risk: You become an unpaid lender to the GC. Meanwhile, you still owe your suppliers and employees, creating a cash flow crisis that can bankrupt your business.
What it sounds like: “You’re responsible for your work.”
What it really means: You’re responsible for the GC’s mistakes, the owner’s negligence, design defects, and site conditions you had no control over.
The real risk: A workplace accident caused by someone else’s negligence can expose you to massive liability that may exceed your insurance coverage. Your insurance may not even cover claims outside your actual scope of work.
What it sounds like: “Changes require written approval.”
What it really means: The GC can direct extra work verbally, then claim it was included in your base contract when it’s time to pay.
The real risk: You perform thousands of dollars in additional work based on field directions, then discover the contract language makes it nearly impossible to collect.
What it sounds like: “Standard termination provisions.”
What it really means: The GC can terminate you at any time, potentially keeping your retention and charging you for completion costs, even if you weren’t in breach.
The real risk: You lose not just future work, but money you’ve already earned. Worse, you might be charged for the cost to complete work you never agreed to do.
Understanding these contract provisions isn’t about becoming a lawyer but protecting your business. Here are the critical issues that catch most subcontractors off guard:
Lien Rights Waivers Hidden in Payment Language. Many subcontracts contain language that waives your lien rights with each progress payment. You might think you’re just acknowledging receipt of payment, but you’re actually giving up your most powerful collection tool.
Scope Creep Through Vague Work Descriptions. When your scope of work is poorly defined, everything becomes “included” in your base contract price. The more vague the description, the more free work you’ll be expected to perform.
Insurance Requirements That Don’t Match Your Risk. GCs often require insurance coverage that far exceeds your actual risk exposure or require you to name them as additional insureds for claims that should be their responsibility.
Dispute Resolution Clauses That Favor the GC. Arbitration clauses might sound fair, but they often require you to travel to the GC’s location and use arbitrators familiar with the GC’s preferred procedures.
Karalynn Cromeens has spent 17+ years reviewing subcontracts and handling construction disputes. After filing over 1,000 mechanic’s lien lawsuits, she founded The Subcontractor Institute and wrote “Quit Getting Screwed: Understanding and Negotiating the Subcontract” because she kept seeing the same preventable disasters destroy good subcontractors’ businesses.
While reviewing and negotiating GC contracts protects you from their worst terms, creating your own construction contracts puts you in the driver’s seat. Here’s when custom contract creation makes sense:
Direct Owner Projects: Property owners often have no construction contract at all, or they download something inappropriate from the internet. Professional construction contract creation ensures you’re protected while looking competent and established.
Specialty Work Where You Have Leverage: If you’re the only qualified contractor for specialized work, use that leverage. Custom contracts that reflect your expertise and unique value prevent clients from treating you like a commodity.
Established Client Relationships: Once you’ve proven your value, many clients prefer working with contractors who provide professional, clear agreements rather than handshake deals or vague work orders.
Cash Flow Disasters: Pay-when-paid clauses can freeze your payments for months. Meanwhile, your material suppliers and employees still expect to be paid on schedule. Many subcontractors go out of business not because they can’t do the work, but because they can’t manage the cash flow disruption caused by payment delays.
Liability Exposure You Never Agreed To. Broad indemnity clauses can make you responsible for accidents, design defects, and problems outside your control. One lawsuit can exceed your insurance coverage and threaten your assets.
Lost Lien Rights. Complex waiver language can eliminate your lien rights without you realizing it. Once you’ve waived your lien rights, collecting unpaid amounts becomes much more difficult and expensive.
Destroyed Business Relationships. Contract disputes often destroy valuable business relationships. Poorly written contracts create misunderstandings that turn routine projects into bitter legal battles.
Contract Review for GC Agreements. We review GC contracts from your perspective, not theirs. We identify clauses that put you at unfair risk and explain precisely what you’re being asked to agree to in plain English.
Custom Contract Creation When You Need Your Own. We draft custom subcontracts designed to protect your business for direct owner work, specialty trades, or when you want to take control of contract terms. Instead of constantly working under someone else’s terms, you get contracts written specifically for your operations.
Strategic Redlining and Direct Negotiation. We provide specific language changes that protect your interests while maintaining your relationship with the GC. We can negotiate directly with the GC on your behalf when needed; our redlines are reasonable and defensible, not deal-killers.
Lien Rights Protection. We ensure that payment and waiver language preserves your lien rights throughout the project. Your lien rights are often your only real leverage for collection.
Professional Construction Contract Creation. When you want to control the terms instead of always reacting to someone else’s contract, we create custom agreements explicitly designed for your business. From direct owner relationships to specialty trade work, proper construction contract creation gives you the protection and leverage that working under others’ terms never will.
48-Hour Turnaround. We understand that GCs want signed contracts back immediately. We offer guaranteed 48-hour turnaround on contract reviews under 30 pages because we know you can’t afford to lose work while waiting for legal review.
For GC Contracts You’re Asked to Sign. When working with a GC for the first time, their contract terms set the foundation for your relationship. Understanding what you’re agreeing to prevents problems later.
When You Want Your Own Contract Terms. For direct owner relationships, specialty work, or when you want to control contract terms instead of always accepting someone else’s, custom contracts designed for your specific business operations give you the protection and leverage you need.
For Large or Complex Projects. The larger the project value, the more important contract terms become. Multi-trade coordination, tight schedules, and technical specifications create more opportunities for disputes that clear contract language prevents.
For Construction Contract Creation. When working directly with property owners, handling specialty projects, or establishing terms with repeat clients. Professional construction contract creation ensures you’re protected while positioning yourself as the established, professional contractor you are.
Most subcontractors sign GC contracts without fully understanding the risks they’re accepting. The few hundred dollars you spend on professional contract review can prevent thousands in losses and legal fees.
Our contract reviews consistently identify serious payment risks, liability exposure, and lien rights issues that subcontractors would have otherwise missed. The cost of review is minimal compared to the protection it provides.
Contact The Cromeens Law Firm today – nationwide contract services available in all 50 states.
Call (713) 715-7334 or submit your contract online. Don’t let a bad subcontract destroy the business you’ve worked so hard to build.
