Contract Trap Words Cheat Sheet

Risk: Open-ended liability far beyond the contract value.

Suggested Redline: Limit damages to direct costs and cap at contract value.

Risk: Creates immediate default risk for minor schedule slips.

Suggested Redline: Add reasonable cure period before default.

Risk: Can shift all risk to the contractor regardless of fault.

Suggested Redline: Limit to damages caused by contractor negligence.

Risk: Ties your payment to upstream funding you do not control.

Suggested Redline: Require payment within a fixed number of days.

Risk: Eliminates compensation for owner-caused delays.

Suggested Redline: Allow delay costs for owner or force majeure events.

Risk: Daily penalties can erase profit quickly.

Suggested Redline: Cap LDs and set mutual waiver thresholds.

Risk: Owner can reject work without objective criteria.

Suggested Redline: Require reasonable, documented basis.

Risk: Transfers hidden condition risk to contractor.

Suggested Redline: Allow equitable adjustment for concealed conditions.

Risk: Overrides protections you thought were negotiated.

Suggested Redline: Remove or clarify scope of overrides.

Risk: Broad liability exposure beyond insurance coverage.

Suggested Redline: Align with insurance limits and negligence.