In the wake of the pandemic, the rise in material costs has been excessive, and globally, contractors have suffered massive financial loss because of it. No one was prepared for COVID, so no one was prepared to foot such a drastic bill when returning to work. Karalynn not only understands, as the co-founder of a material supply company with her husband, but she has also come prepared with a solution. Karalynn is back in action in this solo episode of the Quit Getting Screwed Podcast, Episode 14: When Pricing Isn’t Pretty, where she singlehandedly confronts every contractor’s worst fear (or at least one of them), returning to a project after material costs increase.
Karalynn’s goal is to answer the following questions:
- What do I do if I have already signed a contract but haven’t started working?
- What do I do if I am in the middle of a project, and only then is it clear that material costs are larger than I planned for?
- What should I do before I sign a contract at all?
- What could I put in my bid to prevent this?
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Her first suggestion in approaching these questions is to communicate. In all instances, communication is the best route. If you have already signed a contract, but have not begun work, Karalynn suggests you have a conversation with your client before you begin, explaining what has happened, how it has happened, and why you need more funds to complete the project due to the circumstances. If someone is willing to work with you, work with them. You may not be able to get everything back, but if you can recover most of the fees, it is worth it to find the best compromise you can. If they say no outright, take your contract to a construction lawyer and see what your rights are. Sometimes, there are provisions in your contract that enable you to guarantee compensation for funds lost due to circumstances outside of your own control.
Karalynn is only cracking the surface with this advice. She picks apart what options a contractor has when trapped within this tough situation, gives guidance for a multitude of scenarios, spells out what a Guaranteed Maximum Price Contract is, and provides legally supported verbiage contractors can insert into their contracts to best protect them on the front end from increasing material costs. Her nearly 17 years of construction law and contract creation experience are not to be taken for granted, so listen in and take notes!
Subscribe to the Quit Getting Screwed podcast so you receive notifications when the next episode goes live. Quit Getting Screwed is an education and construction industry lifestyle podcast that uploads every Monday. For more from Karalynn, follow The Cromeens Law Firm on Facebook, LinkedIn, or Instagram. You can also purchase the book that started it all, Quit Getting Screwed, on Amazon.
This article is intended as a general educational overview of the subject matter and is not intended to be a comprehensive survey of recent jurisprudence, nor a substitute for legal advice for a specific legal matter. If you have a legal issue, consult an attorney.