Texas Construction Contract Negotiation for Subcontractors

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Texas construction contract law is full of pitfalls for the unwary. This is particularly true for subcontractors, who often have little bargaining power in construction contract negotiation. A subcontractor contract that hasn’t been reviewed by a Texas construction lawyer may expose a subcontractor to many unknown risks and liabilities under Texas construction contract law. Here are some common issues to address in a subcontractor contract.

Construction Contract Overtime & Pay-When-Paid Clauses

General contractors often draft a subcontractor contract with overtime provisions requiring a subcontractor to work overtime on demand to meet construction milestones. Subcontractors should make sure that subcontractor contract requires the general contractor to pay the extra costs associated with overtime and to pay the subcontractor an added premium. A Texas construction lawyer can help you draft the right construction contract language. Pay-when-paid clauses are also a troublesome aspect of construction contract law and lawsuits between general contractors and subcontractors. Subcontractors should object to any pay-when-paid clause in the construction contract, and should instead require payment within 30 days of the subcontractor’s invoice.

Construction Contract Plans & Change Orders

A subcontractor construction contract typically obligates a subcontractor to a number plans and specifications named in the construction contract. In construction contract negotiation, a subcontractor should demand the most current plans and specifications with all revisions. Also, oral changes to the plans and specifications should not be allowed. The construction contract should require written change orders by an authorized person before you are required to perform construction or purchase materials.

Indemnification & General Contractor’s Liabilities

Often, a subcontractor contract attempts to make the subcontractor liable for the general contractor’s construction contract with the Owner. Subcontractors should avoid these subcontractor contracts. Alternatively, seek advice from a Texas construction lawyer to review all relevant documents to investigate the extent of their construction contract liability under Texas construction law. Additionally, a subcontractor should demand indemnification from claims for the general contractor’s negligence or other subcontractor’s negligence.

Texas construction contracts and subcontractor contracts can quickly become the source of contention between contractors and subcontractors. Additionally, Texas construction contracts are governed by state and federal construction law, making it important to consult with a Texas construction lawyer. Our Austin business law firm regularly advises construction law issues, so contact us today!

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