Look Out For Traps In Construction Contracts
He noted that there is a gap between the design business and the construction business. He suggested that contractors who are filling the gap protect themselves by purchasing “contractor design liability insurance.”
“Whether you like it or not, everyone is in the design business,” he said. “The question is: how do you protect yourself if you are in the design business?”
Disputes or claims usually arise over the issue of “the scope of the work,” he maintains, “but there is no insurance that covers defective workmanship.”
KEY POINTS TO CONSIDERSklar said it is important to be on the lookout for certain key words, clauses, and procedures. He listed several of them and passed along some words of advice.
WRITE IT DOWNSklar emphasized throughout his seminar that it is very important to document all correspondence during a design or construction project and to save all paperwork, including:
“The way to deal with a change order is that you must learn to document,” he noted. “The three most important words involving change orders are document, document, and document.”
Sklar added that if a contractor is writing a letter to the general contractor for approval of a change order, the letter “should be written to the judge or arbitrator who will rule on the dispute three years later.”
For example, he suggested that the letter state that if you don’t hear from them within a certain number of days, they therefore approve of the changes.
For more information, contact Sklar at email@example.com (e-mail).
Publication date: 12/16/2002