Sub-contractor accountability contracts

[Robert Freeborn]

On a recent flip, I had an electrician set us back by 3 weeks with no shows, walk-offs and other delays.  I want to put together some contract that I have all my subs sign with some sort of contingency to cover events like this, maybe with a penalty against the final invoice per missed day or walk off. I'd also be interested in a general, "any expense or total expenses above 10% of invoice bid require direct approval. If you go over that without permission I will only be responsible for the 10% overage."  

Anyone have anything prebuilt like this you'd be willing to share?

[Chris K.]

In the "proper" construction world, the AIA system is the default system. All proper developers, architects, general contractors, and subcontractors understand how the AIA system works. So we can proceed with larger construction projects without having to reinvent the wheel every time. 

Unfortunately, it's kind of like the wild wild west in the smaller construction world. You can make the contractors sign whatever you want, but having them follow it is a totally different matter. And oftentimes, the owner really has no practical remedies if the contractor breaches the contract. Many smaller contractors live paycheck to paycheck. So if they took your money and spent it, there's not much you can do to recover it. 

So you can include "liquidated damages" and specific procedure for "change order" work. But actually enforcing them is very, very difficult. This is even true for someone like me that's a lawyer and owns a construction company. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.