Contract Terms to Negotiate

Price isn't the only thing on the table — the terms can matter just as much.

Key terms to watch

• Payment — schedule, timing, deposit, and retainage amount.
• Scope & change orders — a clear scope and a fair change-order process.
• Schedule — completion dates and liquidated damages (penalties for delay).
• Indemnification — who's responsible for which losses.
• Termination and dispute resolution (mediation/arbitration vs. court).

Negotiate the terms that carry real risk, not just the number.

Going Deeper (Intermediate)

Don't sign the standard contract blindly — negotiate the risk-shifting terms. The big ones: scope, payment timing (avoid pay-if-paid), retainage, schedule/liquidated damages, change process, indemnity, termination, and dispute resolution. Negotiating terms is negotiating money.

Advanced / Pro-Level

The highest-risk clauses to push back on:

• Pay-if-paid (you don't get paid unless the owner pays the GC — try for pay-when-paid).
• No-damage-for-delay (bars your delay costs).
• Broad-form indemnity (covering the other party's own negligence — limited/void in many states).
• Uncapped liability and harsh liquidated damages.
• Unilateral termination for convenience and long warranty periods. Add your clarifications/exclusions, watch flow-down onto your subs, and get legal review of any contract you'll use repeatedly.

Practice Challenge

A subcontract says you're paid "only if and when the GC is paid by the owner." Why fight this clause? (Answer: that's pay-if-paid — it shifts the owner's nonpayment risk onto you, so an owner default means you may never be paid for work you did; negotiate it to pay-when-paid (timing only) or add protections, because the term directly controls whether you get your money.)

In Practice

A contractor focuses only on price and ignores a brutal liquidated-damages clause — then a weather delay costs a fortune. The terms carry as much risk as the number.

Common Mistakes to Avoid

• Negotiating only the price
• Ignoring payment, retainage, and damages terms
• Accepting unlimited indemnification

Takeaway: Negotiate the terms that carry risk — payment, retainage, change orders, schedule/damages, and indemnification — not just price.

Educational content — not legal advice. Have contracts reviewed by an attorney.