How to Estimate Electrical Projects | Dubious Contract Clauses

Costly Contract Clauses, Part 1

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January 4, 2012

Contracts are, for most cases, a positive form of protection for all parties in a common constructive goal, such as, a construction project. These legal devices help outline the rights and responsibilities of each party that signs.

By signing a written contract you are obligating yourself and your company to the performance of that document. Your signature allows courts to generally enforce the provisions, provided those provisions are not beyond applicable contract law allowed in your state or municipality.

Most contractors have little experience being a lawyer and can get caught up into very bad terms by not reviewing a contract thoroughly. By signing a contract that contains the following clauses, you can pur yourself and your company at risk. These risks can be limited by negotiating with the contracting party. In some cases, walking away is the best option.

Work Scope:

Your proposal or bid must be used to determine the work you have agreed to perform. The terms you set in that proposal need to be incorporated into any contract you are going to sign. For instance, an electrical contractor usually bids work on the “E” plans. If your contract states the A, P, M, E and S plans, you could become responsible for work on all such plans. Limit your contract to the work you proposed. Some unscrupulous engineers, architects and owners are placing such clauses in the specifications. For example:

Sections 15500 & 16722 of the Project Specifications (Excerpts are attached).

i.        Section 15500 – 1.02 reads: “THE ENTIRE BUILDING SHALL BE PROTECTED BY A COMPLETE WET SPRINKLER SYSTEM. THE SYSTEM SHALL COMPLY WITH ALL RULES & REGULATIONS OF BODIES HAVING JURISDICTION AND WHERE MODIFICATIONS ARE REQUIRED TO THAT SHOWN ON THE DRAWINGS TO OBATIN SUCH APPROVALS, AND THAT THEY SHALL BE PROVIDED WITHOUT EXTRA COST TO THE OWNER. THE SPRINKLER SYSTEM SHOWN ON THE DRAWING IS DIAGRAMATIC. IT IS THE RESPONSIBILITY OF THE FIRE PROTECTION CONTRACTOR TO INSTALL A COMPLETE SYSTEM IN ACCORDANCE WITH NFPA 13 AND ANY REQUIREMENTS AS REQUIRED BY THE LOCAL FIRE MARSHALL.”

ii.        Section 16722 1.02D & E reads: D. “THE FIRE ALARM SYSTEM SHALL CONSIST OF ALL NECESSARY HARDWARE EQUIPMENT AND SOFTWARE PROGRAMMING TO PERFORM THE FOLLOWING FUNCTIONS: 1. FIRE ALARM & DETECTION OPERATIONS  2. REMOTE MANUAL & AUTOMATIC CONTROL OF ELEVATORS, ALL SMOKE CONTROL RELATED FAN SYSTEM, DOOR HOLD-OPEN DEVICES, FIRE SUPPRESSION APPLIANCES, REMOTE MONITORING OF SPRINKLER AND OFF PREMISE NOTIFICATION.  E. RELATED SECTIONS: THE FOLLOWING SECTIONS CONTAIN REQUIREMENTS THAT RELATE TO THIS SECTION: 1. DIVISION 15 SECTION “FIRE PROTECTION” FOR WATER FLOW, PRESSURE, OR TAMPER SWITCHES CONNECTED TO FIRE ALARM SYSTEM.”

This clause eliminates cost to owner and liabilities to the engineer for incomplete drawings. You must qualify your proposal or be prepared to negotiate these clauses out of your contract.

Incorporation by Reference:

These terms are usually harder to find and understand in many situations. This provision can make you party to the terms between the General Contractor and Owner or others. Did you see or read these other contractor documents? You could be accepting terms like:

A no lien contract (very bad)
Design responsibility
Notice provisions
Payment provisions
What can you do?

Request a copy of the agreements or contracts and read them thoroughly. Insert language to limit the clause. If your customer (i.e. GC) agrees to a no lien contract SO HAVE YOU!! That’s bad. This clause will remove your only recourse to enforce payment once your work is complete.

This site is for informational purposes only and does not contain legal advice.


Comments

September 16, 2013 @ 12:21 AM EDT
By b smith
thank you

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