Home Blog Construction Contract Negotiation: Preparation, Key Clauses, Risks

Construction Contract Negotiation: Preparation, Key Clauses, Risks

This page explains construction contract negotiation, its key clauses and preparation, and how a lawyer from ContractsCounsel can help you negotiate your contract.

Jump to Section

A construction contract is a legal agreement signed between parties who are involved in a construction project, such as between a property owner and contractor or supplier.

This contract includes important information to govern their working relationship, such as scope of work and payment terms. It can be negotiated if you don’t feel satisfied with what it outlines.

Read the rest of this article to learn how to effectively negotiate construction contracts so that you reduce your risks and ensure satisfaction with the project.

How Should You Prepare for a Construction Contract Negotiation?

If you need to negotiate your construction contract, you shouldn’t approach this lightly or without doing your research. This will reduce your chances of being successful. Here are some tips to help you prepare.

Gather Information

You should collect as much information as you can about the project and factors influencing it, such as market conditions. Think about your main goals in completing this project as this will form the foundation for your negotiation.

Review Your Contract

You can’t negotiate a construction contract if you haven’t properly and thoroughly reviewed it. Go through every clause carefully for any red flags and sections you’d like changed.

If you don’t have a legal background or experience with construction contracts, it’s wise to consult with a qualified, experienced lawyer for a professional review of this document.

You can get a legal review of your contract on ContractsCounsel, an online legal marketplace that connects clients with lawyers who have been vetted on the platform. Simply post your project on the ContractsCounsel marketplace (it’s free). Lawyers interested in your project will send you bids. You’ll be able to review the lawyers’ information before choosing a lawyer who best matches your legal requirements.

Getting a legal review of your construction contract will give you peace of mind that it’s legally sound and it’ll break down what you should negotiate for a more favorable outcome.

Detail All Included Costs

This will ensure that all materials, labor, overheads, and other aspects of the construction project have been included in your budget. When everything is laid out clearly, you’ll be able to better check the information against your contract and negotiate terms with the other party.

What are the Main Clauses Involved in Construction Contract Negotiation?

There’s no such thing as a standard contract that can’t be negotiated. While you can negotiate many things in your construction contract, you should pay special attention to the following key clauses.

Scope of Work

This section includes what work will be performed and what won’t be included to avoid issues such as scope creep. Ensure that all dates and deadlines are outlined and that they’re reasonable, while accounting for weather or material delays.

You should negotiate for clarity, such as regarding your list of materials, so that you can identify any changes you’d like.

Payment Terms

This section explains how the contractor will be paid for their work, such as by defining total prices, payment schedules, and more.

You might want to negotiate when payments take place and deposit percentages. There could also be a negotiation opportunity for any changes to scope that would influence the costs.

Risks

Consider indemnification clauses and make sure that risk is adequately allocated should there be any losses during the project.

Check that all warrantees have the correctly specified duration and scope.

Dispute Resolution

This is essential to include in a contract in case disagreements arise. You want to define exactly how they will be resolved, so make sure you and the other party are satisfied with the methods, such as mediation or arbitration.

Penalties

Should there be delays in the project, you want to ensure that as the owner you’re compensated. However, there should be fair and reasonable ideas of what constitutes delays, such as missed deadlines and contractor/supplier error. It’s also worth negotiating how much written notice is required to avoid last-minute delays.

What are the Risks of Not Negotiating a Construction Contract?

If you decide to sign a drafted construction contract without negotiating any of its clauses, this could potentially increase your risks. These include the following:

  • Failed projects. If you haven’t negotiated terms or gained clarity on them, you might end up with a delayed or failed construction project. This can cause you to lose money.
  • Expensive litigation. If you don’t negotiate terms related to scope, payment, and other major concerns in the construction contract, you could end up having to go to court over disputes, which is time-consuming and costly.
  • Risks. You could shoulder unnecessary risk if you don’t discuss the indemnification clauses ahead of signing the contract.
  • Strained working relationships. Disputes can cause permanent damage to relationships with your contractor, suppliers, and other individuals.

How Can a Lawyer Help You With Construction Contract Negotiation?

A lawyer can help you enter into successful negotiations with the other party so that you ensure your construction project meets your requirements and quality standards. They can also assist you with the following:

  • Reducing your risks. They will identify any red flags in the contract, such as too vague or generic clauses that can be misinterpreted and one-sided clauses that favor the other party. This will prevent you from taking on responsibility for risks.
  • Staying legally compliant. You want to ensure that your construction contract is aligned with all construction laws in your location, as well as building codes and federal rules. This prevents you from running into problems or having disputes at a later stage.
  • They’ll use their negotiation skills. Lawyers are experienced in knowing how to bargain with the other party so that you can get what you need.
  • They’ll review your contract. By providing a legal review of your construction contract, your lawyer will ensure it’s fair to both parties, reasonable, and legally enforceable.
  • They’ll identify negotiable clauses. There could be clauses in your contract that you don’t realize could be negotiable, but your lawyer will help you spot them.
  • They’ll consider your specific project. This will help them to negotiate based on what matters most to you.

Do you need to hire a lawyer for a construction contract negotiation?

Knowing how to negotiate with your supplier or contractor can feel stressful, but you don’t have to go through it alone or risk not getting what you want for a successful project. Hiring a lawyer from ContractsCounsel will help you to navigate the situation, protect your interests, and avoid making mistakes that lead to an unfavorable outcome.


ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

Michael J. on ContractsCounsel
View Michael
5.0 (1)
Member Since:
July 14, 2022

Michael J.

Partner
Free Consultation
Warren, New Jersey
18 Yrs Experience
Licensed in NJ, NY
New York Law School

Combining extensive experience in litigation and as general counsel for a real estate and private equity company, I provide ongoing guidance and support to clients on a variety of transactional matters, including business formation, partnership agreements, corporate agreements, commercial and residential leasing, and employment issues.

Recent  ContractsCounsel Client  Review:
5.0

"Michael did an excellent job. I will hire him again. Thank you!"

Anand A. on ContractsCounsel
View Anand
5.0 (39)
Member Since:
July 17, 2022

Anand A.

Counsel
Free Consultation
Philadelphia, PA
12 Yrs Experience
Licensed in NJ, PA
Rutgers University School of Law

Anand is an entrepreneur and attorney with a wide-ranging background. In his legal capacity, Anand has represented parties in (i) commercial finance, (ii) corporate, and (iii) real estate matters throughout the country, including New Jersey, Pennsylvania, Delaware, Arizona, and Georgia. He is well-versed in business formation and management, reviewing and negotiating contracts, advising clients on financing strategy, and various other arenas in which individuals and businesses commonly find themselves. As an entrepreneur, Anand is involved in the hospitality industry and commercial real estate. His approach to the legal practice is to treat clients fairly and provide the highest quality representation possible. Anand received his law degree from Rutgers University School of Law in 2013 and his Bachelor of Business Administration from Pace University, Lubin School of Business in 2007.

Recent  ContractsCounsel Client  Review:
5.0

"Anand was a pleasure to work with! He was very thorough and professional."

Howard B. on ContractsCounsel
View Howard
5.0 (1)
Member Since:
July 29, 2022

Howard B.

Managing Member
Free Consultation
Tulsa, Ok
13 Yrs Experience
Licensed in OK
University of Tulsa

Berkson is a dedicated, practical, and detail-oriented attorney licensed to practice in every state court of Oklahoma and the United States Northern and Eastern District Courts. He graduated from the University of Tulsa College of Law with Honors. While there, he received awards for highest grade in trial practice, legal research, and civil procedure. He was also the Executive Notes and Comments Editor for the Energy Law Journal, the official journal of the Energy Bar Association in Washington, D.C. The Energy Law Journal is one of the few peer-reviewed journals in the legal profession. Prior to becoming an attorney, Howard Berkson held executive positions involving a wide range of business and human resources management functions. He has in-depth knowledge of both business and HR practices. During his business career, Berkson negotiated, wrote, red-lined, and disputed contracts. He has answered charges, handled inspections, and supervised audits involving numerous agencies including the Department of Labor, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, and various state agencies. Berkson honed his analytical and writing skills while earning his Bachelor of Arts degree in Philosophy from the University of Washington. He went on to obtain a Master of Arts in Labor and Industrial Relations from the University of Illinois. Berkson’s work can be found in such publications as The Energy Law Journal, Human Resource Management Review and Personnel Psychology. He is a member of Phi Alpha Delta law fraternity and of Phi Kappa Phi honor society.

Recent  ContractsCounsel Client  Review:
5.0

"Very easy and effective to work with. Howard knows what he is doing."

Gill D. on ContractsCounsel
View Gill
5.0 (72)
Member Since:
July 31, 2022

Gill D.

Attorney
Free Consultation
Tampa
17 Yrs Experience
Licensed in FL
Stetson University College of Law

Erik has been a practicing attorney in Florida for over a decade. He specializes in employment and real estate contracts. He has represented clients big and small and can assist with any contract issue.

Recent  ContractsCounsel Client  Review:
5.0

"Completed a review of the document I requested within an hour or two of being hired very responsive"

Travis D. on ContractsCounsel
View Travis
5.0 (1)
Member Since:
August 8, 2022

Travis D.

Partner
Free Consultation
Norman, OK
6 Yrs Experience
Licensed in OK
University of Oklahoma

Travis counsels individuals and businesses on a broad range of complex topics. His practice centers on producing efficient, client-driven results. He concentrates his practice on real estate, construction, and general business matters with an emphasis on assisting clients both before and after problems occur by drafting contracts designed to best position clients to avoid disputes and litigating matters to a final resolution if problems emerge. Born and raised in Oklahoma, Travis is a triple graduate of the University of Oklahoma, having obtained his Bachelor of Arts, Master of Business Administration, and Juris Doctor degrees from OU. Prior to practicing law, Travis managed the finances and business operations of a successful construction supply company for several years. This insight into sophisticated business dealings, contractual issues, and strategic planning makes him uniquely qualified to handle a wide range of legal matters. Travis lives in Norman with his wife, Haley, dogs, Walter and Poppy, and cat, Ernest. Outside of the office, Travis enjoys playing golf and reading.

Recent  ContractsCounsel Client  Review:
5.0

"What a great service! Will definitely recommend to family and friends!"

Christopher M. on ContractsCounsel
View Christopher
4.9 (8)
Member Since:
August 16, 2022

Christopher M.

Corporate Counsel
Free Consultation
North Cariolina
6 Yrs Experience
Licensed in CA
California Western

I am a corporate attorney with several years of experience with contracts, corporate and business, government projects, and employment law.

Recent  ContractsCounsel Client  Review:
4.3

"Chris helped us put together a quick SaaS contract. HE is very nice and professional."

AHAJI A. on ContractsCounsel
View AHAJI
Member Since:
July 8, 2022

AHAJI A.

Attorney
Free Consultation
Houston, TX
27 Yrs Experience
Licensed in NC, TX
Indiana University - IUPUI

Ahaji Amos, PLLC is a Houston-based intellectual property and civil litigation firm servicing clients throughout the U.S.

Gayle G. on ContractsCounsel
View Gayle
Member Since:
April 18, 2024

Gayle G.

Chief Legal Officer/Fractional GC
Free Consultation
Atlanta, GA
27 Yrs Experience
Licensed in GA, NY
Northwestern University School of Law

Fractional General Counsel and Board Advisor with over 26 years of experience advising companies and their management in the US, EMEA and APAC. I use my legal and finance background to understand the client's business and bring the most practical, efficient legal solutions to grow the business while reducing risk. Focus includes: Compliance | Governance (including AI) | Tech Transactions | Licenses | SaaS | Cross Border | Equity Investments | JVs | International Expansion | Fractional GC https://www.linkedin.com/in/ggorvettesq

Deborah W. on ContractsCounsel
View Deborah
Member Since:
September 4, 2022

Deborah W.

Managing Partner
Free Consultation
Michigan
29 Yrs Experience
Licensed in MI
Michigan State University College of Law

Williamson Health Law is an established and trusted law firm focused on representing hospitals, health plans, physician groups, physicians, physical therapy businesses, psychologists and other health care providers, professionals, and businesses in all aspects of health law. including the Stark law, the Anti-Kickback Statute (“AKS”), the Health Insurance Portability and Accountability Act (“HIPAA”), regulatory compliance, Medicare and Blue Cross audits and overpayment appeals, payer departicipation and disaffiliation appeals, payer and provider disputes, reimbursement and billing, compliance plans, health care industry contracts and professional licensure. We represent clients throughout Michigan and the U.S. with certain federal matters such as federal regulatory analysis and Medicare audits.

Bolaji O. on ContractsCounsel
View Bolaji
Member Since:
August 9, 2022

Bolaji O.

Princial Attorney
Free Consultation
New York
7 Yrs Experience
Licensed in NY
Texas Souther University - Thurgood Marshall School of Law

Bolaji O. Okunnu is an entertainment lawyer and founder of the Okunnu Law Group, PLLC based in New York, New York. His practice includes work in the area of copyright, trademark, contract, intellectual property and business law. As an entertainment attorney, Bolaji represents a diverse roster of celebrities, record labels, music publishers, artists, bands, entrepreneurs, authors, songwriters, artist managers, record producers and entertainment executives concerning their intellectual property, business affairs and creative assets. He is an expert at solving complex and sophisticated legal and business issues relating to contracts, copyrights and trademarks. With his background in both the law and the music business, he brings a broad perspective to problem-solving and business plan strategies. He also has an extraordinary ability to speak to the hearts of creatives while helping them discover their voice and clarify their creative dreams and assignments.

Matt M. on ContractsCounsel
View Matt
Member Since:
August 16, 2022

Matt M.

Attorney
Free Consultation
Orem, Utah
19 Yrs Experience
Licensed in UT
Washington & Lee University

I love to learn, and I love solving problems. That's why I became a lawyer, and learned to solve legal problems for individuals and businesses and help them fix things when there's a snag. Touch base if you think I could have something to offer for you or your company. Experienced, results-oriented legal professional whose background and education have established him as a valuable resource in areas of corporate law, franchising, litigation, compliance, mortgages and banking, and more. Practice Areas Include: Corporate law, Franchising, Litigation, real estate, corporate law, civil disputes, insurance representation, corporate counseling, dispute resolution, risk management, regulatory counsel, compliance. Experience involves sophisticated as well as routine corporate structuring and transactions, simple and complex litigation, and written and oral advocacy such as depositions, mediated settlement conferences, trials, appeals, written pleadings and discovery, and case strategy and analysis. Experience managing and litigating disputes between parties and negotiating settlements across the spectrum of civil litigation, including probative discovery, successful motions practice, legal research and writing, appellate practice, and legal consultation to individuals and business entities. Further experience includes digesting and monitoring updates to the legal landscape to advise clients or departments and successfully adapt policies and procedures to assure compliance with applicable laws and regulations as well as to manage risk effectively. For those needing a skilled commercial or corporate lawyer, or for individuals whose rights need persuasive advocacy, I am a valuable resource. Representative work also has involved success on the appellate level, as in Baker Construction Company, Inc. v. City of Burlington and Hawthorne, LLC, North Carolina COA09-13.

Find the best lawyer for your project

Browse Lawyers Now

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Need help with a legal contract?

Post Your Project

Get Free Bids to Compare

Hire Your Lawyer

CONTRACT LAWYERS BY TOP CITIES
See All Construction Lawyers
CONSTRUCTION CONTRACT NEGOTIATION LAWYERS BY CITY
See All Construction Contract Negotiation Lawyers

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

View Trustpilot Review

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

View Trustpilot Review

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

View Trustpilot Review

How It Works

Post Your Project

Get Free Bids to Compare

Hire Your Lawyer

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city