Managing Risk for Your Contracts Part 1
Although contracts are undoubtedly the lifeblood of the construction industry, their somewhat rigid nature means that they can’t always account for every event that arises during the project timeline. There’s plenty of external factors that can affect your ability to meet the terms of your contract, and it’s imperative that contractors gauge these factors and work with a Jacksonville construction lawyer to draft contracts that ably manage a broad range of risks.
When you violate your contract — whether it be a missed deadline, defective work, or something else entirely — there’s a strong possibility that a dispute is on the horizon. Nobody wants to clash with an owner, but when you fail to manage contractual risks, you’re opening yourself up to a litany of potential legal issues. From the moment you align with an owner for the improvement of real property, our Jacksonville construction lawyers can assist you with negotiating, drafting, and reviewing your contract. The extra level of oversight our Jacksonville construction lawyers contribute to contracts help you avoid costly disputes and preserve relationships with owners. In this two-part series, we will detail the steps you can take to manage risk for your contracts.
Unexpected Material Cost Increases from Tariffs
When you sign off on a contract, you factor in an array of expenses, including material costs, but what happens when material costs change part way through the project? Recently, steel and other construction material tariffs have affected the price of projects. Ongoing construction projects that take years to complete can be hit with steep material cost increases unexpectedly when tariffs are involved. Considering the fact that a tariff can be established at the president’s discretion through the use of an executive order, building trades and owners can have their expectations subverted at a moment’s notice as material costs increase dramatically. Naturally, your contract may not account for this risk.
Weathering the Effects of a Storm
Nobody can control the weather, but you can control the terms of your contract to manage risks related to rain, sleet, and snow. Bad weather can cause the price of materials to rise, effect delivery schedules, and increase the market price of labor. Your workforce may be sidelined for days or even weeks if catastrophic weather strikes your project site, and it may be impossible to work within the proposed budget once you fall behind schedule and account for material cost increases. If you don’t consult a Jacksonville construction lawyer before drafting your contract, bad weather could lead to project delays, potential liquidated damages, and claims.
In part two of this two-part series, our Jacksonville construction lawyers will discuss the limitations of force majeure provisions and how contractors can reach an amicable solution with owners who don’t want to exceed the original proposed contract price.
If you would like to speak with a Jacksonville construction lawyer, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.