Construction contracts can be long and complicated documents, and form the basis of the relationships between the signing parties. Despite this, and the fact that reviewing the contract is essential to providing insight into many aspects of the project, many parties don’t fully examine the contracts they sign.

Since the contract describes the work to be performed and its cost, and gives insight into the fairness of the parties, the allocation of risk, and the parties' relative bargaining power, it's important for construction companies to know what is being signed.

When desired, construction contracts can be used to carve out legal positions, limit rights, and require burdensome and difficult actions. Generally speaking, parties at the top of the contracting chain have more leverage, and can use their contracts to shift financial risk down the contracting chain.

Despite the ability to shift this financial risk, and the real and worthwhile desire of all companies to protect themselves, it makes more sense over the long run, and in terms of building repeatable and lucrative relationships, to contract fairly.

These contract provisions can create animosity before the project starts

There are several contract clauses that, to certain and somewhat variable extents, signal a reluctance to fair bargaining, or at least a desire to exert leverage to the fullest extent possible. Some particular clauses are viewed with disfavor by the parties with less leverage.

This starts the project on the wrong foot, and can result in quick escalation of situations that could otherwise be handled without too much trouble. Some of these provisions are:

While not all of these contract provisions are enforceable, their appearance in a contract can signal that a party is attempting to shift risk and insulate itself at all costs — even if that means foregoing fairness.

Since good relationships and respect are built upon a foundation of fairness, inclusion of these provisions in undiluted or unexplained form is not beneficial to fair dealings and growing relationships between construction parties. While there may be short-term benefit to the inclusion of this type of term in a contract, constant use of such provisions may not be beneficial.

Further, while it makes good business sense to establish a company as one that is fair to the parties it contracts with, even if that may mean a slight decrease in the amount of leverage exerted over customers, that exertion itself can occasionally be legally deficient.

For example, pay-when-paid clauses are generally not interpreted to mean that payment can be avoided indefinitely, so holding onto payment based on pay-when-paid contractual provisions may open up a general contractor to the strict financial penalties set forth by many states. Likewise, over-reliance on strict and unchangeable lien waiver provisions and forms can result in the ineffectiveness of the waiver.

While there are many reasons, both legally and in business, that show why being fair in construction contracts is a good idea, there shouldn’t need to be any reason other than "it’s fair." Being fair is the right thing to do, and the fact that it can lead to better relationships and more business is just the icing on the cake.