Virtual legal counsel for contractors and consultants

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The draft contract from your head contractor must be signed this week, 'let us know any issues’ (they don't want to hear them).  Price, dates and scope are ok, so you sign.​ Did you intend to take on all the client’s risks?  Does the margin justify unlimited liability? Have you taken on things that will wipe out the profit anyway?

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Your fee should be based on your pricing of the risk.​​ Upstream risks are passed to you, and if you don't push back or pass them on, they stay with you. Australian Standards-based contracts are very common, but are now very principal-friendly.  You need to ask for the market-standard things to go back in. Some are:

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• no cap on liability. Event when there is a cap there will be carve outs. Many contracts set your exposure to damages above the contract sum, even above what you think is covered by your insurance (and it is common to agree to terms that void your insurance, so the cover you thought you had isn't necessarily there).

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• liability for the client's lost profit? If you can't find 'consequential loss' or 'indirect loss', you have probably agreed to this.

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• wide ranging indemnities. Should the client be required to prove its losses or try to limit them, or do they just send you a bill?

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• extensions of time categories are often very limited and you would probably want relief for more than just client default or variation.

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• Can you terminate if things are really bad?​

 

Virtual / fractional legal counsel

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You might not need an in-house legal team, but you need someone on call who knows your business and the industry.  As a virtual legal counsel, I'm available when you want to quickly check something, or to put forward practical and useful amendments to a draft contract.​ I can help protect against common tender and construction phase issues including:

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• contracts: reviewing and negotiating practical but important changes to tender contracts and builder side deeds

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• market review of your T&Cs: when were they created? Did you use someone else's as a template? Your risk profile is not the same.  Simple changes can help ensure your profit and company are protected.

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• subcontractor contracts: these need to align with the head contracts (generally) and ensure that you are not wearing their defects or delays.

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• pass-through risks: advising on key risks to your business that have been passed through to you and the subcontractors.

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• defects: preparing and responding to defect claims, documenting evidence of defects and loss flowing from them (and consequential damage)

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• variation, delay, security of payment claims: preparing and responding to variations, extensions of time and force majeure claims

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• security and disputes: bank guarantees, insolvency, disputes and settlement

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Call me for a quick chat to find out more.