The Ultimate Compendium of Scary Contract Terms

October 25, 2019 Uncategorized 0 Comments

scary construction contract terms

Y’all. ‘Tis the season.

Well, not that season. The other one: The one with lots of pumpkin spice and disappointing moments for college football fans.*


Now, in the past, I’ve talked about the various clauses you need to watch for in construction contracts. In fact, I’ve talked about it quite a few times.  That’s just what I do.

I mean, I’m a lawyer.

I love reading construction contracts.  I love helping people understand the contracts they’re signing, and what those various clauses can mean for their financial security.

Anyway, in honor of Halloween, I decided that I should try rounding up all of those articles about contract clauses, so that you can glance in one place and find whatever you need.

Before you sign the dotted line on any construction contract, make sure to give things a glance over, and see if any of these Scary Contract Terms appear.  If they do, there’s no need to fret, but that does mean that you need to be extra careful.

The one thing scarier than ghosts, goblins, and the number of calories in a Snickers bar, after all, is losing money.


  1. Paid When Paid: This common clause shifts the risk of slow payment to subcontractors.
  2. Paid If Paid:  This clause is related to the Paid if Paid clause, but goes further by also shifting the risk of non-payment.
  3. Indemnification :  Nearly all contracts have some sort of indemnification clause.  The key is making sure that your insurance coverage is sufficient for your needs on the particular job.
  4. Liquidated Damages:  Liquidated damages impose specific penalties for each day that a project runs over schedule.  If your contract features a liquidated damages provision, be sure that you have the resources to complete the job on time, and if any delays are caused by outside parties, make sure that you have a paper trail.
  5. Attorney’s Fees:  These clauses dictate who will pay for legal costs, and where legal matters will be disputed.  If something goes wrong, these fees may impact your ability pursue legal recourse.

Know these terms.  Understand them.  Watch for them.  And if you encounter them in the wild, be sure to take the proper precautions.




*Now, to be fair, fall is not disappointing for all football fans. However, our office is located in Arkansas, and this office is heavy with Ole Miss alumns.  As such, REM’s ‘Everybody Hurts’ tends to be pretty relevant come Sunday morning.


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About the Author

Tipper Coker

Lawyer. Vice president of business development. Hopeless nerd who's read far too many AIA contracts.