Let’s Have an Honest Conversation About Subcontracts

by Karalynn Cromeens, Cromeens

I remember the first subcontract I ever read as a baby attorney. My exact thoughts were this thing is so bad you are better off burning it than trying to fix it. It was so one-sided in the general contractor’s favor that it would be easier to start from scratch than to try to even out the subcontract I was reading. Not too much has changed regarding the form of most subcontracts, but subcontractors are taking more time to understand what they are signing and trying to negotiate better terms.

How did subcontract become so one-sided?

Having grown up in a family construction business and later becoming an attorney, I can see how these contracts became one-sided. As an attorney, you are taught to draft documents from the perspective of what is in your client’s best interest. Normally after an attorney drafts the contract, there is a negotiation to even out the terms of the contract. That negotiation rarely happened; subcontractors wanted to avoid rocking the boat. They just wanted to get the job and go to work. This lack of negotiation is how the standard terms of a subcontract became so one-sided, and that just became the standard.

What is the job of a contract?

The true job of a contract is to describe the relationship between two or more parties so each party is clear on what to expect moving forward. If the contract is not written in a way that can be easily understood, then it fails at explaining what is required of each party and is destined to fail. Whatever needs to be said in a contract to explain the parties’ relationship can be said in plain English; very few things in a contract require legalese to be effective. A new idea in construction: write the contracts, including subcontracts, so that everyone can understand them, not just attorneys. If everyone can read the contract and understand what they are supposed to do, the parties’ relationships would be much more successful.