Most of the terms that cost a general contractor money aren't hidden. They're standard language in the general conditions or an addendum, and they get skimmed because the signing date doesn't move. Work through the seven areas below with the full contract set in front of you: agreement, general and supplementary conditions, exhibits and addenda. We use AIA A201-2017, the AIA's standard general conditions, as the reference point because many contracts are built on it or edited from it. Sections are cited so you can compare; the text is paraphrased.
1. Structure
Start with what the contract consists of and which document wins when two disagree.
Check
- Every document that forms the contract, listed by title and date, and anything incorporated by reference that you haven't seen: the owner's prime contract, site rules, a project manual that isn't attached.
- Order of precedence. A201-2017 doesn't rank the documents; it treats them as complementary, so a requirement in one binds as if it were in all (§ 1.2.1). If the owner's form adds a "most stringent requirement governs" rule, every conflict between drawings and specs becomes your cost.
- Price mechanics: lump sum, cost-plus or GMP. For a GMP, what counts as Cost of the Work, how contingency and allowances are used, and who keeps savings.
- Struck-through text and handwritten edits: confirm that language you agreed to delete is gone from the signature copy.
Red flags
- An entire-agreement clause that wipes out your bid qualifications and exclusions.
- Documents incorporated "as amended from time to time."
Ask for
- Your qualifications and exclusions attached as an exhibit that controls over the drawings and specs, and a closed list of contract documents.
2. Risk allocation
These clauses decide who pays when someone is hurt, property is damaged or the design is wrong.
Check
- Indemnity scope. A201-2017 § 3.18.1 limits the contractor's indemnity to bodily injury and damage to property other than the Work, and only to the extent caused by the negligence of the contractor, its subs or others it's responsible for. Compare the owner's version: "any and all claims arising out of the Work," a duty to defend, coverage of the owner's own negligence.
- State limits. Most states have construction anti-indemnity statutes, and they vary widely (Gordon Rees 50-state survey, current through January 2021). New York, for example, voids construction clauses requiring indemnity for injury or property damage caused by the indemnitee's own negligence, in whole or in part (N.Y. Gen. Oblig. Law § 5-322.1). Don't count on a statute to rewrite an overbroad clause after the fact.
- Total liability: capped, for example at the contract sum or your insurance limits, or unlimited.
- Warranties: length, start date, and any "fitness for purpose" promise that makes you answer for the design. A201's correction period runs one year from Substantial Completion (§ 12.2.2.1).
Red flags
- Indemnity regardless of fault, or a defense obligation triggered by any allegation.
- Open-ended warranties that start at final completion or owner acceptance.
Ask for
- Negligence-based indemnity "to the extent caused by" you, a cap on total liability, and warranties that start at Substantial Completion.
3. Damages
Check what you owe if you finish late and what you can recover when the owner delays you.
Check
- Liquidated damages: the daily rate, the trigger (Substantial or final completion), any cap, and whether LDs are the owner's only remedy for delay. See our liquidated damages guide.
- Consequential damages. A201-2017 § 15.1.7 is a mutual waiver: the owner gives up items such as rental expenses and lost use, income, profit and financing; the contractor gives up items such as home-office expenses and lost profit other than profit arising directly from the Work. It expressly leaves room for liquidated damages. Check whether the owner's form deletes it or makes it one-way.
- Delay damages. A201 extends time for owner-caused delay (§ 8.3.1) and doesn't preclude delay damages (§ 8.3.3). A no-damages-for-delay clause leaves you time but no money. Some states limit these clauses: Washington voids waivers of damages for unreasonable delay caused by the owner, while allowing notice requirements and reasonable LDs (RCW 4.24.360). See our no-damages-for-delay guide.
- Holdbacks and setoffs: a 200% punch-list holdback (one of the examples we use on this site), or owner rights to set off amounts claimed on other projects.
Red flags
- Uncapped LDs, LDs on top of actual delay damages, or LDs that run to final completion.
Ask for
- An LD cap, LDs as the sole remedy for delay, and the mutual consequential damages waiver restored.
4. Insurance & bonding
These requirements end up in your price whether you read them or not.
Check
- Required coverages, limits and endorsements against your actual program. A201-2017 leaves the requirements to the Agreement and names the owner, architect and architect's consultants as additional insureds on the contractor's CGL policy (§ 11.1.1). Send the insurance exhibit to your broker before you price.
- Builder's risk (property insurance). A201-2017 has the owner buy the property insurance the Agreement describes, and tell the contractor in writing before work starts if it won't (§ 11.2). If the owner's form shifts it to you, price the premium and deductibles.
- Waiver of subrogation: A201's is mutual and limited to losses covered by property insurance (§ 11.3.1). Make sure the owner's version runs both ways.
- Bonds: penal sums, the bond form, and on federal work the performance and payment bonds the Miller Act requires (40 U.S.C. § 3131).
Red flags
- Limits above what you carry, additional-insured status for completed operations with no end date, or professional liability for delegated design you didn't price.
Ask for
- Limits that match your program, a mutual waiver of subrogation, and owner-provided builder's risk.
5. Notices
Notice clauses decide claims. Under A201-2017, a Claim must be noticed within 21 days after the event or after you first recognize the condition, whichever is later (§ 15.1.3.1), and a claim notice counts only if delivered by certified or registered mail or by courier with proof of delivery (§ 1.6.2). Email doesn't qualify. Concealed conditions must be reported before they're disturbed and within 14 days (§ 3.7.4).
Check
- Every trigger, deadline, recipient and delivery method, in one matrix, and whether each clock runs from the event or from when you knew.
Red flags
- Windows measured in hours, certified mail as the only method, or "failure to give notice shall constitute a waiver."
Ask for
- At least 21 days, a knew-or-should-have-known trigger, email to named addresses, and a prejudice standard instead of automatic waiver. Details in our notice provisions guide.
6. Payment & termination
Read how and when money moves, and how either side can end the contract.
Check
- Payment timing, withholding rights and interest. Under A201-2017 § 9.7, if the owner doesn't pay within seven days after the due date, the contractor may stop work on seven more days' notice. Under § 2.2, you can ask for reasonable evidence of the owner's financial arrangements before work starts, and again if payments lapse. Check that the owner's edits keep both.
- Retainage rate, reductions and release, and any state limits. See our retainage guide.
- What you flow down to subs, including pay-if-paid terms that may be void in your state. See pay-if-paid vs. pay-when-paid.
- Termination for convenience. Under A201-2017 § 14.4.3, the owner pays for work properly executed, costs caused by the termination (including terminating subcontracts), and a termination fee only if the Agreement sets one. Leave the fee blank and you may recover no profit on the unperformed work.
- Termination for cause. A201 requires the architect's certification and seven days' notice to the contractor and its surety (§ 14.2.2). Check cure periods and what happens if a termination for cause turns out to be wrongful.
Red flags
- Withholding "for any reason," no stop-work right, or cure periods of 24 to 48 hours.
Ask for
- Payment within a fixed period with interest, a stop-work right, and a termination-for-convenience fee.
7. Site conditions
Find out who carries the risk of what's in the ground and behind the walls.
Check
- A differing site conditions clause. A201-2017 § 3.7.4 covers conditions that differ materially from the contract documents and unusual unknown conditions; federal contracts use FAR 52.236-2.
- Whether you can rely on owner-furnished surveys and geotechnical reports, or they're labeled "for information only."
- Site-examination clauses. In United States v. Spearin (1918), the U.S. Supreme Court held that an owner who furnishes plans and specifications impliedly warrants them, and that general clauses requiring the contractor to examine the site and check the plans don't overcome that warranty. It's a federal decision; how your state treats an owner's disclaimers is a question for counsel.
- Hazardous materials. A201 has the contractor stop work in the affected area and notify the owner and architect on finding hazardous material the documents don't address, if reasonable precautions won't prevent foreseeable bodily injury or death (§ 10.3.1).
Red flags
- A deleted differing site conditions clause, "contractor accepts all site conditions," or no right to rely on owner reports.
Ask for
- A differing site conditions clause covering both categories, reliance on owner reports, and time and money for unforeseen hazardous materials.
How RivetData flags this
RivetData runs this sweep on every contract. It reads the base agreement, general conditions, exhibits and addenda together, including scanned and redlined pages, and detects struck-through text so a deleted clause is never scored as a live term.
Not legal advice: always a draft a person confirms. See how the review works →
FAQ
What should a general contractor look for first in a construction contract?
Start with the terms that can take the job's margin no matter how well you build: indemnity and insurance, liquidated and consequential damages, notice deadlines, payment and termination rights, and site-condition risk. Then read the exhibits and addenda, which can change the general conditions.
Do standard AIA contracts still need a review?
Yes. A201-2017 is a common starting point, but owners modify it through supplementary conditions and edits, and the agreement carries its own business terms. The changes are where the risk is, so compare the version you've been handed against the standard form.
Can I rely on state law to void a bad clause?
Sometimes, but it's a poor plan. Most states have anti-indemnity statutes, and some limit pay-if-paid or no-damages-for-delay clauses, but the protections vary by state and project type. Negotiating the clause costs less than litigating whether it's enforceable.
Do I still need a lawyer if I use a checklist or an AI review?
For material risk, yes. A checklist or an AI review helps you find and rank issues; a construction attorney licensed in the project's state should advise on enforceability and on how to respond. RivetData's output is advisory and always a draft a person confirms.
Related guides
- Notice provisions: how contractors lose valid claims on a technicality
- Pay-if-paid vs. pay-when-paid clauses
- Retainage in construction contracts: what to check before you sign
- No-damages-for-delay clauses
- Liquidated damages in construction contracts
Sources
- AIA Document A201-2017, General Conditions of the Contract for Construction. §§ 1.2.1, 1.6.2, 2.2, 3.7.4, 3.18.1, 8.3, 9.7, 10.3.1, 11.1.1, 11.2, 11.3.1, 12.2.2.1, 14.2.2, 14.4.3, 15.1.3.1, 15.1.7 (paraphrased).
- AIA Contract Documents: Conventional (A201) Family.
- Gordon Rees Scully Mansukhani, 50 State Survey: Anti-Indemnity Statutes (2021).
- N.Y. General Obligations Law § 5-322.1.
- Revised Code of Washington § 4.24.360.
- 40 U.S.C. § 3131 (Miller Act bonds).
- FAR 52.236-2, Differing Site Conditions.
- United States v. Spearin, 248 U.S. 132 (1918).
This guide is general information, not legal advice. Contract terms and the law vary by state and change over time. Have a construction attorney licensed in your project's state review your contract before you rely on it.