Commercial Painting Subcontract Clauses That Cost Painters Money

The subcontract arrives after you have won, when the pressure to sign is highest and the appetite to argue is lowest. It is usually a standard form the contractor uses on every job, it is usually not negotiable in most respects, and it contains a small number of clauses that decide whether a job that goes wrong is a bad month or a serious problem.

What belongs in a straightforward painting agreement is covered in what should a painting contract include, and the document itself in the painting contract template. This is about the terms that appear when you are the subcontractor rather than the principal.

Flow down, and the contract you never saw

Almost every subcontract contains a clause binding you to the terms of the main contract between the contractor and the owner, as they apply to your work. It is usually one sentence and it can be the most significant sentence in the document.

The effect is that obligations you have not read become yours. Programme requirements, notice periods, quality standards, insurance levels, dispute procedures and sometimes damages provisions all arrive through that single clause.

The response is simple and frequently skipped: ask for a copy of the main contract, or at least of the general conditions and any schedule it refers to. A contractor who will not provide it is telling you something. Where you cannot get it, ask for the flow down to be limited to obligations that have been disclosed to you, and expect that request to be refused more often than granted.

Payment conditioned on the contractor being paid

Two versions of this exist and the difference matters enormously.

A pay when paid clause is generally read as a timing mechanism. You get paid when the contractor does, and if the contractor is never paid, you are still entitled after a reasonable period.

A pay if paid clause attempts something stronger: it makes the contractor receiving payment a genuine condition of your entitlement. If the owner never pays, you never get paid, whatever the quality of your work.

Whether the second is enforceable varies considerably between states, and the wording required to achieve it is scrutinised closely by courts. That variation is precisely why this is worth checking locally rather than assuming, and it is the single clause most worth spending a favour on in negotiation. Your protections if payment fails are separate again and are set out in painting contractor lien rights.

No damages for delay

This clause says that if you are delayed by others, your remedy is more time rather than more money. The programme moves and your costs do not get recovered.

For a painting subcontractor this is a real exposure, because painting is near the end of the sequence and absorbs the accumulated delay of every trade before it. A crew mobilised for a start date that slips repeatedly costs money whether or not anybody accepts responsibility.

Where the clause cannot be removed, and it usually cannot, the practical mitigations are contractual and operational. Ask for a carve out for delays caused by the contractor itself, which is a common compromise. Keep dated records of every delay and every remobilisation. And price the risk into jobs where the programme looks fragile rather than treating it as bad luck when it happens.

Liquidated damages and the schedule you do not control

Liquidated damages are a stated amount payable for each day of late completion, agreed in advance rather than proved later. On the main contract they run from the contractor to the owner, and a flow down clause can pass a share of them to you.

The exposure for a painter is asymmetric. Your portion of the contract sum is small, and the damages relate to the whole project, so a delay attributed to painting can carry a liability out of all proportion to your value. That asymmetry is the argument to make when asking for the clause to be capped, and a cap tied to your subcontract value is a reasonable and often accepted request.

The mechanism is set out plainly in the federal liquidated damages clause for construction, which is a useful reference precisely because it is short and public.

Indemnity and hold harmless

An indemnity clause makes you responsible for defending and paying claims arising from your work. In its ordinary form that is reasonable, since you should stand behind your own negligence.

What to read for is scope. Some clauses extend the indemnity to claims arising from the contractor negligence as well as your own, which is a very different proposition and is restricted or void in a number of states. Others require you to defend a claim from the moment it is made, before any finding of fault, which imposes cost regardless of the outcome.

Check also that whatever you are agreeing to indemnify is actually covered by your insurance, because an indemnity broader than your cover is an uninsured liability sitting on your balance sheet. That is a conversation to have with your broker before signing, not after a claim.

Additional insured and certificate requirements

Nearly every commercial subcontract requires you to name the contractor, and often the owner and others, as additional insureds on your liability cover, and to provide a certificate evidencing it before you start.

Two traps. The first is timing: certificates take days to produce and the requirement is discovered on the morning of the start. The second is scope, because a requirement for cover on a primary and non contributory basis, or with a waiver of subrogation, is not the same as simply adding a name, and each of those affects your premium and may need endorsing.

Send the subcontract insurance section to your broker rather than the summary, and get confirmation that what is required is what has been issued.

Set off, back charge and the deduction you find out about later

A set off clause lets the contractor deduct from money owed to you amounts they say you owe them: cleaning, damage, delay, work done by others to correct yours, or shared site costs.

In practice this is the most common way painting subcontractors lose money on otherwise successful jobs, because the deduction appears on a payment certificate with a one line description and no supporting detail, long after the event.

The defences are procedural. Ask for the clause to require written notice before a back charge is applied and an opportunity to correct the work yourself, which is a reasonable request and often accepted. Photograph your work at completion in each area. Respond in writing to every deduction the week it appears rather than at the end of the job, since a contemporaneous objection is worth far more than a later recollection. The cost of putting things right is worth understanding in advance through painting callback and rework costs.

Termination for convenience

This clause lets the contractor end your subcontract without you having done anything wrong, usually on notice and with payment for work completed.

Read what you get paid on termination. A fair clause pays for completed work, materials ordered and non recoverable costs. A harsh one pays only for work in place, which leaves you holding material bought specifically for the job and any demobilisation cost.

The clause is not unreasonable in itself, since projects genuinely do get cancelled. What is unreasonable is a version that transfers the entire cost of cancellation to the subcontractor who had no part in the decision.

Notice provisions, and the clause that quietly kills claims

Buried among the procedural terms there is usually a clause setting out how quickly you must notify a claim for extra time or extra money, and it is frequently short. A few days from the event is common, and some forms require notice before the additional work is performed.

The reason this matters more than its length suggests is that these provisions are often treated as conditions rather than as formalities. A claim that is entirely justified on its merits can fail purely because notice was given late, and the painter who did the work in good faith and raised it at the end of the month has no remedy left.

The operational fix is a habit rather than a negotiation. Whenever anything happens that will cost you time or money and is not your fault, send a short written notice that day, referencing the clause, describing the event, and reserving your position on cost. It does not need to contain a number. It needs to exist and to be dated.

Keep those notices in one place with the job file. A sequence of dated notices is the difference between a claim and a complaint, and it costs a few minutes each time.

Public work, and the terms that come with it

Public projects add a further layer that arrives through the same flow down route: wage determination requirements, reporting obligations, and sometimes hiring or apprenticeship provisions. The applicable wage schedules are published rather than negotiated, and can be looked up at the wage determinations service. How this changes the bid is covered in prevailing wage painting jobs.

The framework governing what a prime contractor must pass down to subcontractors on federal work is set out in the subcontracting policies, and while private work is not bound by it, the structure of most private subcontracts follows it closely.

Negotiating when you have almost no leverage

You will not rewrite a contractor standard form. What you can do is pick two or three clauses that represent your real exposure and ask for those, in writing, politely, before signing.

The requests most often granted are a cap on liquidated damages at your subcontract value, notice and an opportunity to cure before back charges, and a carve out from the delay clause for delays caused by the contractor. None of those is unusual and none of them costs the contractor anything unless something goes wrong.

Where every request is refused and the terms are genuinely severe, that is information about how the relationship will run rather than a hurdle to clear. The decision to decline is a legitimate one, and it is easier to take before signing than after.

This is general information about commercial contracting practice and not legal advice. Subcontract terms bind you, their effect varies by state, and anything you are unsure about should be reviewed by an attorney in your jurisdiction before signature.

Frequently asked questions

Can I attach my own terms to a subcontract

You can try, and on smaller contractors it sometimes works. On a standard form from a large contractor, expect an order of precedence clause that puts their document first, which means your attached terms have no effect unless specifically incorporated.

Is a purchase order the same as a subcontract

Legally it can be, and painters routinely start work on one. The risk is that a short purchase order incorporates a long set of standard terms by reference, so the two page document you read is not the agreement you made.

What if the subcontract contradicts my bid

The subcontract normally wins unless your bid is expressly incorporated. If your qualifications matter, ask for them to be attached and referenced, and check that they were, as painting bid exclusions and clarifications explains.

Should I get every subcontract reviewed by a lawyer

Not every one. Get the standard form of each contractor you work with reviewed once, since you will sign it repeatedly, and treat that as a fixed cost of entering commercial work rather than a per job expense.

How do I know if a pay if paid clause is enforceable here

You do not, from the wording alone. It varies by state and by how the clause is drafted, and it is one of the clearest cases for a single conversation with a construction attorney who practices where you work.

What is the biggest mistake painters make with these documents

Signing without reading because the work is needed. The second biggest is reading, noticing a problem, and signing anyway without raising it, because a concern raised before signature is a negotiation and the same concern raised afterwards is a complaint.