Situation

A subcontractor is eager to win a bid with a new main contractor but is presented with a lengthy, fifty-page subcontract agreement to review and sign. Concerned about the time and cost involved, the subcontractor contacts their lawyer to inquire about a review fee. The proposed cost feels high for what seems like a standard agreement, so, to avoid further expense and delay, they decide to sign the contract without a full review.

Problem

Unbeknownst to the subcontractor, the agreement contains several unfavorable clauses that severely impact their rights and obligations. Key issues include the exclusion of pandemics as an excusable delay, a strict three-day deadline for delay notices (not even allowing for weekends), a meager $1 per day for qualifying delay events, and liquidated damages clauses that act as penalties rather than fair compensation for delays. Additionally, the subcontractor unknowingly agreed to work under all weather conditions, exposing their team to potential safety risks and making it challenging to schedule around adverse weather.

Outcome Without Commercial Mate

Without the support of a commercial management platform, the subcontractor is bound by restrictive terms that impact their ability to manage delays, respond to unforeseen events, and claim fair compensation for project disruptions. This oversight places significant financial and operational strain on the subcontractor, leading to increased risk exposure and reduced profitability on the project.

Outcome With Commercial Mate

Clear Contractual Insight
With Commercial Mate’s guidance, the subcontractor could access essential contract review insights, helping them spot unfavorable terms and understand the full impact of each clause on their business.

Risk Awareness and Proactive Negotiation
Using Commercial Mate’s risk assessment tools, the subcontractor would have identified potential issues, such as the strict delay notice deadline and all-weather work requirement, equipping them to negotiate fairer terms or at least make an informed decision.

Quick Access to Expert Advice
Through unlimited consultations, the subcontractor could seek quick advice from Commercial Mate’s experts, helping them assess the contract’s fairness and identify red flags without the high cost of legal review.

With Commercial Mate, the subcontractor would have been equipped to make a safer, informed decision, ensuring they signed a contract that safeguarded their interests and avoided hidden risks.

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