Essential Contracts Parts

Conflict Clarification: Should any of the Contract Documents contradict each other in any point, or require clarification; the Subcontractor must call the same to the attention of Contractor in writing prior to execution of this agreement. The Owner and Architects interpretation shall govern the scope and performance of the Work and no allowances shall be made in behalf of this Subcontractor for error or negligence on his part in this connection. Any deviation from the Contract Documents must be clearly noted in red or bold type, underlined, on all shop drawings and/or submittals. Approval of deviation must be initialed by Architect and Contractor. Contractors review in no way relieves the Subcontractor of the liability of supplying the materials in accordance with Contract Documents. Subcontractor is to expedite his work without causing delays to other trades on the Project. All Shop Drawings shall be submitted in five (5) copies plus one sepia (transparency) or as requested to Contractor, complying with the Contract Documents as amended. All required notices, reports, certificates, invoices, submittals, samples, shop drawings, etc., shall be sent to the Contractor. Subcontractor agrees to furnish to Contractor the As-Built Drawings, updated on weekly basis, of all work performed by Subcontractor to the extent required by the Contract Documents and/or the Owner.

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Interpretation

This clause may mean that even though there may exist contradictions on the contract document which have to be approved by both the Architect and contractor, the subcontractor is not relieved from his liability even after calling the same to the attention of the contractor in writing as required. The fact that the subcontractor has to speed up the work without delay means that he /she has to begin working from supply of materials as per the contract documents which already have contradictions. If this happens then its like the subcontractor will be acting with negligence of which he will not be paid the allowances for the error he makes yet he has to speed up the work without delay.

Concern

This clause is unfair for our firm but favors the contractor and the Architect who are the only people responsible for approving the conflicts within the contract document. The general contractor can now use erroneous contract documents which compel the subcontractor to speed up the work with minimal delays at the expense of existing errors which are treated as his negligence by denying him the allowances.

Recommendation

This clause should be reviewed to avoid biasness to the subcontractor. The clause ought to be changed to use items like Adjustment in the contract time and sum or other related items as found in AIA A201-2007 contract document. Under this kind of review, any party to the contract found to deliberately overlook conflict or contradiction or use it to harm the other party should be held accountable for the aftermath.

Hold Harmless Agreement: Subcontractor shall be responsible for its Work and every part thereof, and all of the work of every description undertaken or performed by its agents in connection therewith. Subcontractor shall specifically and distinctly assume, and does assume, all risk of damage, injury or death from whatever cause to property or persons used or employed by Subcontractor or his Subcontractors or in connection with his, or his Subcontractors Work, and of all damage, injury, or death from any cause to property wherever located or to any person whatsoever from any operation under this Subcontract or in any way connected with his Work and undertakes and promises to protect, defend and indemnify Contractor against all claims on account of any such damage, injury or death. Subcontractor further agrees to hold Contractor and Owner harmless from the filing of any liens arising out of any work, labor, services and/or materials performed or provided in connection with the Subcontract. Should any such lien be filed, Subcontractor shall immediately cause same to be removed or reimburse Contractor and Owner for all costs including costs and attorneys fees associated with removal of the lien.

Interpretation

This clause means that the subcontractor is responsible for all the risks to his employees or property irrespective of the source of the risk. The overall meaning of this clause is that only the contractor and owner are totally protected from harm or damage as the subcontractor suffers from the results of all kind of risk.

Concern

The main concern here is that the owner or the contractor may be the cause of the risk to the property or subcontractors employees. Under such circumstances, the contractor and the owner may deliberately cause damage for instance to the property for the purpose of gaining protection from the subcontractor through the indemnity of all damages and deaths. As a result, the clause is very biased to our firm.

Recommendation

This clause should be amended to address also address the risk caused by the contractor and owner as away of distributing the accountability equally and on affair basis. In fact the owner should indemnify and hold harmless the contractor and all the parties involved against claims, damages, deaths, expenses as well as attorneys fees as found in the AIA A201-2007 contract document.

Indimnification: To the fullest extent permitted by law, the Subcontractor shall indemnify defend, protect and hold harmless the Owner, the Architect, the contractor (including their respective affiliate, parent an subsidiary corporations) and other contractors and subcontractors and all off their agents and employees from and against all claims, damages, loss an expenses for personal injury, bodily injury, property damage or other damage, including but not limited to attorneys fees and costs whether suit is brought or not, arising out of or relating to the performance or non-performance of the Subcontractors Work provided that: any such claim, damage, loss or expense is attributable to bodily injury to or destruction of tangible property (other than the Subcontractors Work itself including the loss of use resulting therefrom, to the extent caused or alleged to be caused in whole or in any part by any negligent act or omission of employed by the Subcontractor or anyone for whose acts the Subcontractor may be liable, regardless of whether it is caused in part by a party indemnified hereunder.

Interpretation

This clause means that it is the subcontractor who is responsible for protecting all the parties or stakeholders or even affiliates parents against all claims, damages, and expenses among other losses. This implies that the subcontractor is responsible for paying any loss suffered by all these stakeholders. This happen whether or not the loss or damage is caused by the party indemnified hereunder.

Concern

Again, the concern here is that the clause is extremely biased to the subcontractor. The stakeholders involved can deliberately cause damage to property, claims or other losses as away of wrongly gaining indemnity from the subcontractor.

Recommendation

This clause should be deleted completely since it is one sided. It should be re-written so that the contract owner to bear the responsibility of indemnifying the contractor, the employees and other parties as found in the AIA A201-2007 document.

Property Insuarance: Subcontractor hereby waives all rights against Contractor and against the Owner, the Architect, separate contractors and all other subcontractors for damages caused by fire or other perils to the extent covered by property insurance obtained pursuant to the Contract Document or other property insurance applicable to the Work.

Interpretation

This clause means that the subcontractor is responsible for all risks of damages and losses including those of natural calamities. In case of such perils he will have to protect through insurance all the contract parties against losses and damages.

Concern

This clause is biased to the subcontractor to a large extent. The subcontractor will have to pay for even damages and losses to the property caused by earthquakes and other natural calamities on no ground yet he is a stakeholder just like others like the contractor, Architect and the rest.

Recommendation

This clause should also be deleted completely from the contract laws. It should be re-written so that no stakeholder or party is responsible for perils such as natural hazards. The statements such as, the owner may chose to maintain and purchase insurance to insure the owner against the loss of owners property as a result of other perils caused as found in the AIA A201-2007 contract construction document.

Scheduling and Commencement of the Work: Time is of the essence in the performance of this Subcontract. The Subcontractor shall commence the Work under this Subcontract as directed by Contractor. It shall be the responsibility of the Subcontractor to check with Contractors job superintendent for scheduling, delivery of material and time for commencement of work to start at the jobsite for all items covered by this Subcontract. Subcontractor shall pay all necessary premiums to expedite material from supplier in order to meet the Progress Schedule as amended from time to time.

Interpretation

It is the contractor who determines when the work will start at the job site as the subcontractor has to check with the contractors job superintendent for scheduling, material delivery and start date. But the premiums required speeding up delivery of materials and which determines when the job is to begin is to be paid by the subcontractor.

Concern

This clause is also unfair to the subcontractor to some extent. It is the subcontractor expected to pay for the premiums for delivery of materials instead of the contractor. The question is what will happen to the subcontractor if there is a delay in the commencement date due to the inability of the subcontractor to pay the required premiums? Or what if it is the contractor who happens to cause the delay due to ineffective scheduling?

Recommendation

The clause should be amended on the side of premium payments for material delivery. Just as found in the AIA A201-2007 document, the contractor should meet the cost of delivering the materials if the date of commencement is not to be interfered with as per the schedule made by the contractor.

Protection of the Work: The Subcontractor shall take necessary precautions to properly protect the Subcontractors Work and the work of others from damage caused by the Subcontractors operations. Should the Subcontractor cause damage to the Work or property of the Owner, the Contractor or others, the Subcontractor shall promptly remedy such damage to the satisfaction of the Contractor, or the Contractor may so remedy and deduct the cost thereof from any amounts due or to become due the Subcontractor. Contractor shall not be responsible for loss or damage to the Work included in this Agreement, including materials stored on site or off-site, until after final acceptance of the Work by the Architect and itself, except as set forth herein. All materials damaged, lost or stolen shall be promptly repaired or replaced by Subcontractor at no cost to Contractor or the Owner. Subcontractor shall be totally responsible for loss or damage, however caused, to materials, tools, or appliances of the Subcontractor used or to be used in performance of work under this Agreement.

Interpretation

The subcontractor is responsible for cost of any damage caused by the subcontractor to the owners property, contractor or others as long as there is no acceptance of the final work by the architec...