Contracts

Negotiating construction contracts

By Scavi Company · · 3 min read
Negotiating construction contracts

Most contract terms can be discussed if you ask clearly and early.

Priorities

Pick what matters most.

Risk clauses

Indemnity and damages.

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Payment

Terms and retainage.

Schedule

Realistic dates.

Alternatives

Offer options.

Advice

Use an attorney.

A closer look

Contractors often accept unfavorable terms because they fear losing the job. Most owners expect some discussion. Send a short list of requested changes with simple explanations and alternatives, focusing on the clauses that could cause real harm. Keep a standard list of acceptable and unacceptable terms so every project manager negotiates from the same baseline.

Where to start

Create a one-page list of clauses you always review and what you will accept.

Common mistakes

Signing without reading, negotiating everything and having no attorney review.

An example

A subcontractor asked to cap its liability and change pay-if-paid to pay-when-paid. The GC accepted one and offered a compromise on the other. The project went ahead with risk better shared.

What to track

Track which clauses you negotiated, what changed and how disputes on past projects related to contract terms.

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Frequently asked questions

Which construction contract clauses are worth negotiating?

Payment terms, retainage, indemnity, liquidated damages, consequential damages, notice periods, change order procedures and termination clauses are common priorities.