The construction sector is notable for regular contractual relationships that are established between subcontractors and general contractors. The 21st century brings many helpful approaches to make collaboration between parties exceptionally comfortable and even more profitable.
For example, business relationships will be well-managed and transparent with the help of communication apps, cloud-based digital tools, and construction estimating software for accurate financial forecasts and risk-free budget planning.
Speaking about the main peculiarities of contractual backgrounds in the construction sector, they cover the rules, rights, and responsibilities of all the parties that sign the agreement. They can be contractors and clients, subcontractors and general contractors together with customers. It is worth noting that among the most win-win approaches to improve all contractual relationships are paperless workflows and the arrangement of a digital-friendly environment.
For example, a general contractor can use quality construction bidding software to improve the pre-construction phase and be accurate with all the payment responsibilities in the context of subcontractors. But subs can also use digital tools for:
- Communication;
- Budget planning;
- Costing;
- Time management;
- Other purposes.
To sum up, this is a great idea to improve your contractual routines through modern technologies and smart algorithms. Nevertheless, there are special norms and rights to take into account if you are interested in any form of the contractual relationship in construction.
Contractual Rights You Should Remember
To avoid the most common challenges, it is recommended to start with exploring the present-day labor market in the building sector together with its cash flow peculiarities. Then, plunge into the legal base of contractual relationships you are willing to enter with other parties. Know your rights before you sign an agreement with the general contractor.
This way you will be able to prevent the most widespread issues concerning subcontracting and contracting in construction in general (like various scheduling disputes and conflicts according to payouts, day offs, and other organizational moments). Remember that your core rights no one can contest are:
- All the available labor laws that regulate your schedule, health condition, safety on the site, and other moments.
For example, there is the special department of labor (DOL) that regulates all these points. Additionally, consulting attorneys is always a good idea for both experienced subs and beginners in this niche.
- Documentations and permits – your right is to have a copy of the contract and store all the originals of your documents (like certifications, diplomas, etc.) at yours.
Note that any corrections to the agreement are a violation of the labor laws and other jurisdiction backgrounds.
- Control of your work and scheduling is about your business. Just meet the common regulations when it comes to outlined agreement duties and requirements.
But remember that subcontracting is the absolute flexibility of the schedule. While contractors can dictate their rules in the context of the regularity of payments, dates of the scheduled payouts, etc.
But it is worth noting that payment and other contract terms should be discussed by all the parties to the potential agreement. Early planning, management, and negotiations will lead you to a positive result free from conflicts and misunderstanding.
Key Responsibilities of the Construction Contractual Relationships
Do not forget about the key responsibilities all the parties of the contractual relationships have. First, this is only insured cooperation. It is recommended to think of contractors’ and subcontractors’ insurance. This way all the above-listed and other supplementary rights will be protected with the letters of law and insurance policies. Any force majeure situation can take place, so insured contractual relationships are a thing.
Additionally, the key responsibility of both parties is to prove the liability coverage before contracting. It means that the subcontractor should provide certificates, diplomas, portfolios, etc. At the same time, the general contractor needs to provide subs with recommendations, realized projects, and testimonials of the staff. Speaking about the client, GCs can feel free to ask about his/her creditworthiness.
To sum up, search for the compromises, optimal approaches, best-matching solutions, and common language in general at the shore before diving into the contractual river. Do not be shy and ask as many questions as possible. A clear picture or map of expectations, desires, and demands leads to transparent and fruitful relationships.
