Legal Question in Construction Law in California
My question is regarding Construction Law. I have a terms and conditions page within my contract. My client has more or less taken the liberty to re-write my entire document and is demanding that I incorporate all his changes before he signs anything. One of my clauses is in regards to breach of contract by the Owner. My client is not wanting to sign the Terms and Conditions page because he feels that I should have in my T & C a clause for either party's right to stop work for breach of contract for either party. This is what He wanted to have in my T&C and expects me to do this:
"Either party shall have the right to stop all or part of the work on the project, in the event the other party materially breaches the contract, upon five (5) days written notice to the other party. The breaching party will be given reasonable time to correct the breach. If the breach is not corrected within 30 days, then the initiating party may, at their option, terminate the Contract." In my original, my right to stop work is if in case the client breaches the contract for non payment.
I told my client that I'm not obligated to change my T & C for him and I will not put this in my T & C nor any of his changes. Especially because I feel that the way this is written leaves me wide open for him to use anything at any moment for any little thing for him to use or make an excuse as a breach of contract and could be a nightmare.
Please let me know your advise on this. It would be very much appreciated.
3 Answers from Attorneys
This is an unusual kind of response by a prospective client, and it would be useful to know more about him, i.e., what causes him to be so suspicious, careful and cantankerous? Mainly, however, my reaction is that this is the kind of client who spells trouble, and unless there are special reasons for proceeding with him, I think your best bet might be to tell him adios.
In addition to being an attorney, I am also a licensed general contractor. I give seminars regularly to contractors on how to spot problems before they happen. One of the categories of problem owners are ones who try to re-write your contract. You are looking at nothing but problems with this owner. I tell contractors generally to run away from these owners - decline to do any work for them. But if you still want to take the contract, make sure you pay special attention to every detail of the project and add additional money into the amount to cover the inevitable problems that will happen, and to help keep you above water when they refuse to pay the final payment.
It won't matter to the owner if you agree to his changes or not. He will expect, no matter what the contract says, that his changes are the terms. Again, you are looking at nothing but trouble with this guy. Make sure you are prepared and covered when the problems come up.
This is really not a very unusual type of provision. If you look at the AIA contract documents you will find similar clauses and even a "termination for convenience" option that allows the owner to terminate for no reason at all. If I were representing the owner, I would never recommend they sign a construction contract that did not have some form of "notice and opportunity to cure, followed by termination if not cured" provision. The wording of this one is sloppy, and I would recommend it be re-written to be more clear, but a provision of this type is common.
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