Detailed And Thorough Construction Contracts Can Make A Difference

Contracts are the linchpin for success in any construction venture. They are critical to establishing expectations, charting a course of action, defining responsibilities and outlining remedies. Because of their central role, construction contracts require careful review and meticulous detail.

At Long & Robinson, LLC, a construction law practice based in Kansas City, our attorneys understand construction contracts and general contract law. Our long-standing experience in the construction law field gives us valuable insight into avoiding pitfalls and managing risks through effective contracts. We provide thorough and practical guidance for general contractors, subcontractors, developers and other construction clients.

We welcome you to contact us to set up a meeting and get the support you need for your construction contract. We are here to help.

Proactive Strategies For Success

Our firm provides strategic legal services in negotiating, drafting, reviewing and enforcing construction contracts. We routinely advise clients on the elements of a solid contract that will set the stage for success rather than failure, confusion or ambiguity.

Creating a watertight contract is an important proactive strategy for any type of construction project. However, drafting contracts requires a keen eye for detail. Our lawyers can carefully craft and analyze the legal effect of common construction contract clauses such as:

• Indemnity provisions
• Liquidated damages provisions
• Scope of work provisions
• Payment schedules
• “Pay-if-paid” clauses
• “Time is of the essence” clauses
• Delay and extension clauses
• Subrogation clauses
• Bond and warranty requirements
• Dispute resolution requirements
• Choice and law of the forum
• Attorney fee provisions

Our familiarity with the construction industry and the business considerations our clients face enables us to provide focused and nuanced guidance. We combine expertise and collaboration to achieve outstanding results.

“When a contractor faces a construction dispute, they want someone who not only understands the law but, more importantly, understands the construction business. Scott Long rises to the top in that regard. He is a superb construction lawyer who gets things done, and we sincerely appreciate him being on our team.”

– L.D. and Kendall Schoonover, Wilcott Construction, Inc.

Construction Contracts: Key Provisions Explained

When drafting or reviewing construction contracts, it is crucial to understand the specific clauses and provisions that define the rights, responsibilities and liabilities of all parties involved.

Indemnity Provisions

Indemnity provisions outline the obligation of one party to compensate the other for harms or losses incurred in connection with the contract. In a construction contract, these provisions typically require the contractor to indemnify the owner against claims arising from injuries to persons, damage to property or violations of law that occur due to the contractor’s actions or negligence during construction. It’s important to carefully negotiate these clauses to ensure that the indemnity is fair and does not expose a party to disproportionate risk.

Liquidated Damages Provisions

Liquidated damages are a predetermined amount of money that one party agrees to pay to the other as compensation for specific breaches of the contract, such as failing to complete the project on time. These provisions are used to establish a measure of damages if the contractor fails to meet project deadlines. For enforcement, liquidated damages must reasonably estimate the actual damages the owner might incur from delays and must not act as a penalty.

Scope Of Work Provisions

The scope of work provision is a fundamental part of any construction contract, defining the specific tasks and responsibilities of the contractor. This section details the work to be completed, the materials and labor involved, project milestones and the quality standards expected. A clear and precise scope of work helps to prevent disputes by providing a baseline against which the project’s progress is measured.

Payment Schedules

Payment schedules control the cash flow of a construction project. They spell out when the contractor and subs receive progress payments, how the project team measures work in place and when the owner releases retainage and final payment. A clear schedule can prevent fights by listing invoice due dates, the steps for pay application approval and the exact documents required for payment, such as lien waivers, certified payroll, sworn statements, delivery tickets or proof of insurance.

Payment schedules also matter because a small timing issue can create bigger problems, like missed payroll, delayed materials and slowdowns on site. A construction lawyer can review the schedule language, align it with prompt-payment laws and help set up a process that reduces delay, rejects unfair conditions and protects the right to get paid.

Pay-If-Paid Clauses

A pay-if-paid clause says the subcontractor only has a right to payment after the contractor receives payment from the owner. Contractors often use these clauses to shift the risk of owner nonpayment downstream, which can put subs in a tough position even when they perform the work correctly.

While Missouri does not prohibit these clauses, other states like Kansas ban them entirely or enforce them only when the contract uses clear conditional language. This makes it especially important for area construction professionals to have legal guidance when reviewing contracts that contain these clauses.

These clauses can also clash with lien rights and bond rights, especially on public projects where liens do not apply. A construction lawyer can evaluate whether the clause works under local law, explain the risk in plain terms and negotiate better language such as pay-when-paid timing terms, carve-outs for owner-caused nonpayment or a right to suspend work for nonpayment.

Time Is Of The Essence Clauses

A “time is of the essence” clause emphasizes that timely completion is an essential element of the contract. In construction contracts, this means that any failure to meet deadlines can be considered a material breach, allowing the nonbreaching party to seek legal remedies, including terminating the contract. It places significant pressure on the contractor to ensure that the project stays on schedule.

Delay And Extension Clauses

Delay and extension clauses define what counts as an excusable delay and what the contractor must do to secure extra time. Many contracts list events such as owner-directed changes, late design decisions, differing site conditions, force majeure events and unusual weather.

These clauses also set strict notice rules and documentation duties, which often decide the outcome of a claim. If a contractor misses a notice deadline or fails to provide schedule updates and cost records, the contract may block recovery even when the delay proves real. A construction lawyer can help teams send the right notices on time, track critical path impacts and frame claims for time extensions, extended general conditions, acceleration costs or relief from liquidated damages.

Subrogation Clauses

Subrogation clauses are often included in construction contracts regarding insurance. These clauses allow an insurer to step into the shoes of the party it has compensated and seek recovery from the party responsible for the loss. In a construction setting, this could affect how risks are transferred and claims are handled, particularly in cases of property damage or personal injury where multiple parties might be liable.

Bond And Warranty Requirements

Bond and warranty terms shape risk during construction and after closeout. Performance bonds can protect the owner when a contractor defaults, while payment bonds can protect subs and suppliers when they do not receive payment. Bond claims often require strict notice, timing and service steps, so missing a deadline can destroy an otherwise strong claim.

Warranty terms set the length and scope of repair duties and can include limits, exclusions and required cure procedures. Poorly written warranties can lead to disputes over what counts as a defect, who controls the repair plan and how long the builder remains responsible.

A construction lawyer can help draft and negotiate bond and warranty language, coordinate surety notice and manage defect response plans that protect sales, occupancy and long-term exposure.

Dispute Resolution Requirements

Dispute resolution clauses control how the parties must fight and where they must fight. Many contracts require negotiation first and then mediation, arbitration or litigation. The clause may set short deadlines, limit discovery, choose a venue, pick a governing law and define who decides the dispute, such as a judge or an arbitrator. These choices affect speed, cost and leverage. A lawyer can review the clause before a dispute grows, make sure the client follows pre-suit steps and choose a strategy that fits the project’s schedule and business goals.

Choice Of Law Or Forum

The choice of law clause identifies the jurisdiction’s laws that will be used for the interpretation and enforcement of the contract. This is particularly important in construction, as laws can vary significantly between different regions. Similarly, the choice of forum clause determines the location where any disputes related to the contract must be litigated. These provisions are crucial for reducing uncertainties related to legal disputes and ensuring that any legal proceedings are conducted in a predictable manner.

Attorney Fee Provisions

Attorney fee provisions decide whether the winning side can recover legal fees and costs. Fee shifting can change the leverage in a payment dispute and can push both sides toward early settlement. Some clauses award fees only in collection cases, while others cover any dispute tied to the contract. A construction lawyer can help negotiate fair terms, assess fee exposure early and use the clause as leverage during settlement talks or enforcement.

Understanding these key provisions in construction contracts can significantly affect risk management and project execution. Our attorneys can help tailor these clauses to your specific circumstances and ensure your interests are well-protected.

Learn More About What Our Legal Team Can Do For You

Please contact us at 816-708-2218 to arrange a consultation with our experienced construction attorneys. We serve clients throughout the region, and our lawyers are licensed to practice law in Kansas, Missouri, Oklahoma, Colorado, Illinois and Iowa.