"Contract Documents" are More than What You Sign

Did you know… that for your Subcontract the term “Contract Documents” includes many more documents than the agreement you sign?

The vast majority of Subcontracts include all “Contract Documents” as part of your agreement. It is important make sure that the definition of “Contract Documents” in your Subcontract is specific to you. It should also be different than what the phrase means in the Prime Contract.

Most all Subcontracts define the term “Contract Documents” to mean the entire Prime Contract, plus the Subcontract itself. A typical Subcontract section that defines “Contract Documents” may read like the following:

§1.1       Contract Documents include this Subcontract, plus all exhibits and documents referenced herein, the prime contract agreement entered into between Contractor and Owner plus all documents referenced or incorporated therein including all General Conditions, Supplementary and other Conditions (“Prime Contract”), Project Manual, Drawings, Plans, Specifications, Soil Report, Addenda issued prior to execution of this Subcontract, and modifications, changes and directives of the Owner issued after the execution of this Subcontract. If a conflict occurs among the Contract Documents, then the provision or provisions which afford Contractor and Owner the greatest protection and/or the largest quantity or highest quality of materials and/or services shall control.

This is pretty typical language, so how can it come back to bite you?

The first major concern relates to your scope of work. This language means that you are agreeing to provide the subcontract work in conformance with the Contract Documents, which includes ALL plans, drawings and specifications instead of just the ones that you relied on when bidding the project. This could expand your intended scope of work. Especially when there is an exhibit included with the Subcontract that lists all the plans, drawings, and specifications included in the Contract Documents.

One way to clarify your scope of work is to replace the exhibit that lists out all the drawings and specifications with an exhibit that lists only the plans and specs that describe the work you intend to provide. Make sure this list clarifies that these are the only plans and specs you are complying with in performing your work and avoid phrases like: “Subcontractor shall perform its Work in compliance with the Contract Document, including but not limited to the following drawings and specifications.”

Another edit you’d want to make is to clarify in the paragraph that the Contract Documents include only the plans, drawings and specs shown in the exhibit, or if an exhibit is not going to be used, you must clarify which plans and specs apply to your work by adding the plan sheets and spec section right in into the definition, like what is shown below.

The next major concern is that you are agreeing that changes, etc. issued after you sign the Subcontract automatically become part of the Contract Documents, which means they automatically become your responsibility. One fix for this is to add that these later changes only become part of your definition of Contact Documents if it is addressed in a written change order to your Subcontract.

The final major concern that we are addressing today is that sentence that imposes the most stringent provision on the subcontractor if there is a conflict among the Contract Documents, which would include conflicts between the Subcontract and the Prime Contract. This means that the terms you painstakingly negotiated in your subcontract can be overruled by terms in the prime contract that you may assume did not apply to you or, worse, you didn’t even know existed. There are couple ways to soften this. The first is to simply state that the Subcontract controls in case of a conflict. The second is to have the Prime Contact control, except for certain provisions where you want to make sure the Subcontract prevails, such as insurance, indemnity, scope, permits, delay damages, etc.  

Let’s look at what these types of edits (in red font) would look like in our sample subcontract section:

§1.1       Contract Documents include this Subcontract, plus all exhibits and documents referenced herein, the prime contract agreement entered into between Contractor and Owner plus all documents referenced or incorporated therein including all General Conditions, Supplementary and other Conditions (“Prime Contract”), Project Manual, Drawings, Plans, and Specifications as listed herein [OR "as listed in Exhibit A"], Soil Report, Addenda issued prior to execution of this Subcontract, and modifications, changes and directives of the Owner issued after the execution of this Subcontract that are reflected in fully executed change orders to this Subcontract. If a conflict occurs among the Contract Documents, then this Subcontract shall control [OR "the Prime Contract shall control, except the Subcontract shall control conflicts in provisions related to payment, insurance, indemnity, scope, permits, delay damages, and changes"].

So that’s how simple it is to make sure the definition of Contract Documents in your Subcontract really pertains to your scope of work and the provisions you took time to negotiate.