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Component Manufacturing dverti$er
January 2017 #10210 Page #77
Adverti$er
Don’t Forget! You Saw it in the
The Dirty Dozen Subcontract Clauses
Holt Gwyn Conner Gwyn Schenck PLLC
Introduction The following subcontract clauses are taken from actual general contractor subcontract forms in use in the Southeast. Most of these provisions are buried within the “General Conditions” of the subcontract form, often in tiny print. While the precise language may vary, many general contractor-manuscripted form subcontracts contain similar provisions. Normally, truss and component manufacturers can avoid many of these clauses by advising general contractors that the truss manufacturer is a supplier, not a subcontractor, and that the Uniform Commercial Code for the sale of goods applies to their contractual arrangement. So, truss manufacturers who provide no services at the project site other than to deliver the trusses can legitimately refuse to sign a subcontract form, but rather use purchase orders or a supplier agreement. But, pressure is often applied to truss manufacturers to provide site-related services, including erection. Once a truss manufacturer undertakes labor-related services, the truss manufacturer becomes a subcontractor. So, it is important for truss manufacturers who take on the role of a subcontractor to understand the legal effect of these clauses, and negotiate through them at the commencement of a project. It is, of course, too late to renegotiate a burdensome clause once a problem occurs during the job. Even if a subcontractor cannot negotiate the deletion or modification of these clauses, it is still important to understand their effect, so that care can be taken during the job to mitigate the risk of extra costs and other damages such clauses might cause.
Dragnet Scope Clause Subcontractor shall perform all work necessary or incidental to complete the framing work for the Project in strict accordance with and reasonably inferable from the Contract Documents as being necessary to produce the intended results and as more particularly, though not exclusively, specified in [relevant contract documents] Dragnet clauses that require the subcontractor to perform work not expressly detailed in the drawings and specifications often result in an expanded scope of subcontract work and the subcontractor having to perform work that was not included in its estimate. “Necessary or Incidental” and “reasonably inferable … to produce the intended results” means the results intended by the owner and/or design professional, and to protect the General Contractor from scope gaps in its price. Often what is necessary for a complete job is more than what is actually shown on the contract documents. When you see one of these clauses, be careful. Prudent subcontractors often limit their scope of services by adding exclusions.
No-Damage-For-Delay Clause Subcontractor will not be entitled to any claim for damages or increase in the subcontract price on account of hindrance or delay from any cause whatsoever; provided, however, if Subcontractor is hindered or delayed by any act of God, or solely by any act or omission on the part of Contractor, Subcontractor will be entitled only to an extension of time to complete the work, as Subcontractor’s sole remedy. The Dirty Dozen Subcontract Clauses continues PHONE: 800-289-5627
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