negotiating construction projects

Negotiating a construction contract as a subcontractor

As part of your construction project, you will need a construction contract. It is the foundation for the relationship between the main contractor, subcontractors and the client. A good contract protects all parties involved and ensures that the project runs smoothly.

Signing a contract is vital to the project and should never be entered into lightly, particularly as a subcontractor. Subcontractors may see a contract as a necessary evil; they need to sign the contract to secure work and to get paid on time. But they may not be looking at all the clauses in the contract, and they may not have negotiated their part of the contract.

Why might a subcontractor not negotiate the proposed contract?

The reason why a subcontractor may not look to negotiate the contract is that they don’t want to upset the main contractor. Upsetting the main contractor, could mean that they lose the job and other future jobs with this contractor. The other reason may be that employing a professional to read through and make changes to the contract can be expensive.

However, the main contractor may see the lack of negotiation as lazy and unprofessional. Negotiating contracts in all business transactions is the key to keeping your business alive. It is vital that subcontractors minimise their financial risks by reading the contract, identifying risks in the construction contract and negotiating where necessary.

It is far better to negotiate contract amendments before work commences than to have a protracted and expensive legal dispute at the end of the project. Minimising financial risk and any uncertainty in the contract will help avoid those disputes and improve cash flow and profits from the project.

At Chancery Group, we believe in working hard to make progress in the most cost-effective manner rather than working hard to fix expensive, preventable mistakes. Our team specialises in Chartered Quantity Surveying, Cost Consulting Services, Construction Project Management Services, Project Management Surveying and Chartered Engineering Services.

We provide these services across the Republic of Ireland to a wide variety of clients in the private and public sectors, including developers, main contractors, specialist subcontractors, government agencies, religious orders, court services and commercial enterprises. To find out more about our services, contact us via email or call us on 057 935230. Or see what’s new with us on LinkedIn and Facebook.