The general contractor agreement sets the rules for how money moves, how changes are priced, and how disputes are resolved. Owner's representatives and lenders who review these contracts before execution routinely find provisions that shift risk in ways the owner never intended to accept.
1. Pay-When-Paid Clauses
Language that conditions payment to subcontractors on the owner paying the GC can delay trades, trigger mechanic’s liens, and obscure the true state of project cash flow. Clear payment timelines tied to verified completion are preferable.
2. Broad Indemnification Without Caps
One-sided indemnity that covers the GC’s negligence without limitation or insurance backstop can expose the owner to liability far beyond the contract value.
3. Change Order Pricing Without Competitive Benchmarks
Contracts that allow the GC to price changes at cost plus markup without requiring supporting documentation or time-and-materials caps make budget control difficult once construction starts.
4. Schedule Relief Without Consequence
Force majeure and weather clauses are standard; contracts that grant automatic time extensions without a contemporaneous schedule update and impact analysis weaken the owner’s ability to enforce milestones.
5. Limited Audit and Documentation Rights
If the owner or lender cannot audit pay applications, stored materials, and subcontractor lien waivers, draw review becomes a paperwork exercise instead of a financial control.
"A contract review before signing costs a fraction of one unresolved change order dispute."