It’s Wise Up Wednesday! 7 Critical Contractual Checks For Success
7 Critical Contractual Checks! Checking These Is The Key To Success
This week’s “Wise Up Wednesday” is a very brief one about checking the terms you are letting yourself in for, BEFORE you put your head in that contractual noose!
It’s easy to jump in when entering into a contract, after all the deal has been discussed and agreed upon, and sorting the contract is just a formality, right?
Not checking the specific terms that will apply to your works is one of the most common and often fatal mistakes I see on a daily basis!
Don’t get caught out by those dirty tricks hidden in the small print.
Here’s a brief check-list to ensure you don’t sign your business away…
1. Know Who You Are Contracting With!
It might sound like the most obvious thing in the world, but you would be surprised at the amount of Specialist Contractors I see who don’t do their research before getting into projects with a Main Contractor they have never worked for before. Are they good and fair payers, and are they in a secure enough place financially that they will be around to pay you at the end of it all?
2. What’s The Scope Of The Works?
I have lost count of the amount of times I have had to deal with disputes between a Specialist Contractor and Main Contractor about the scope of the works. It might be a bit of a chore, but you can almost guarantee that what you agreed verbally and what is written into the contract regarding scope will be different.
3. What’s The Time Frame?
Time frames are a tricky issue to get right! Depending on the project you may have one start and finish date, or multiple starts and finish times if the work is to be completed in sections.
4. Is The Price Right?
Pricing is one of the main areas where Main Contractors will get you, so please be absolutely sure about this. Make sure the contract includes any qualifications that you are relying on as these often get “lost”, or are excluded by sneaky drafting!
5. Are The Payment Terms Fair?
Payment terms are the biggest cause of disputes in the Specialist Contracting community. They have been the cause of many Specialist Contractors going under, and have cost many more dearly!
6. How Far Does Your Design Liability Stretch?
As Specialist Contractor you will be liable for any design you provide if that design subsequently proves to be faulty. You need to be very clear that your design liability is restricted to reasonable skill and care, and that the far more onerous standard of fitness for purpose does not arise to void your PI cover!
7. Don’t Compromise Your Rights On Dispute Resolution!
Last but by no means least you need to know that your rights have not been compromised by Contractors or Clients! If the contract between you and the Contractor or Client is subject to the Construction Act the contract should have certain provisions which provide some degree of protection.
But beware that these have not been negated by the specific words of the contract!
Amendments Are Never There For Your Benefit
Contracts have and always will be a minefield of sneaky tricks and onerous clauses that are placed there by Main Contractors to reduce their obligations and increase yours!
Being vigilant and checking over the contract before entering into it is the best way to prevent yourself from being caught out.
In the meantime if you need any help with any of your business issues, please don’t hesitate to pick up the phone and give us a call.
P.S. The clue really is in our name – StreetwiseSubbie! We specialise in helping Specialist Contractors of all sizes and in all trades, and our FREE LinkedIn Group now has almost 1,900 members.
So as a first step towards getting to know us, why not come and take a look at how this free resource could help your business?