Covering Your Ass from Start to Finish
Do you ever wonder why all the subcontractors on a project can be sued when just one specific issue arises, even when there is nothing wrong with the other scopes of work? There are so many different factors to be aware of when agreeing to a new construction project. If you do not document everything and read certain provisions carefully, you could end up being sued or liable for payment for damages for work that were not even your responsibility. This is why you should be concerned with prior work: the work of the subcontractors before you.
POP QUIZ!
What do you do if the work of the subcontractor before you is defective?
- I am not required to inspect the project before I begin.
- That is not my problem and is not what I was hired to do.
- Let the general contractor know about any defects in writing, and do not begin work until such defects are corrected.
Did you pass? The correct answer is C.
Why prior work from subcontractors before you matters
So what does this mean for you? This means that you must inspect the project before you begin working, find all defects at the project site, and report any defects in writing to the general contractor. You cannot proceed with any work that will deal with the defective areas until you receive direction from the general contractor in writing about what to do next.
What happens if you do not find and report all of the defects? Unfortunately, if you do not report all defects, you are responsible to fix the defects and any damage they may cause. Yes, this does not seem fair, but if you sign the subcontract without changing this provision when the subcontractor before you is sued for defective work, you will be sued as well.
Be aware of contract provisions regarding prior work
Currently, most subcontracts contain a provision that looks something like this:
Prior to commencing each portion of the Work, subcontractor shall carefully study and compare the Agreement, Order and Exhibits thereto, shall observe conditions at the site affecting the Work, and shall take field measurements of existing conditions related to the Work. Any defects shall be promptly reported by subcontractor to general contractor in writing as a Request for Information. Subcontractor shall not proceed with the affected portion of the Work until it receives general contractor’s written response to such Request for Information, and then only in accordance with general contractor’s response. If subcontractor fails to find and report in writing any defects, subcontractor shall be liable to general contractor for all costs and damages arising out of or relating to any such failure (including any such errors, omissions, or inconsistencies or any such variance).
Do not agree to this unreasonable liability. This provision is in every subcontract and everyone can be sued and held liable. You must C.Y.A.! Make sure you inspect before you begin your scope and report any issues that you discover. It is so common that subcontractors are forced to pay for damage that results from previous workers’ defects.
Conclusion
At The Cromeens Law firm, PLLC, we can help you find this language in the subcontract and suggest language that is not so unreasonable. We can help you negotiate these provisions where you agree to inspect and report but are not responsible for the failure to find all defects. Contact us today if you have a contract that needs to be reviewed. We have seen so many cases where subcontractors get into trouble from just the language of their contracts, and we want to help protect you. Courtney Stricklen will teach you how to best protect yourself and your business at our Free C.Y.A. webinar on October 20th at 12 pm. RSVP today; we look forward to seeing you.