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Become familiar with ‘scope of work’ and indemnity in contract agreements

Understanding those terms can limit liability

Pam 0 5983 Article rating: 5.0

Subcontractors may be unaware they can review and negotiate subcontracts before signing them.

Negotiating can be as simple as "red lining" words to delete from the document or adding words or sentences.

Two important items that should be thoroughly reviewed before signing any subcontract agreement are the “scope of work” and “indemnification” clauses. The scope of work should be clearly defined and is usually one of the first paragraphs of the subcontract. 

Indemnity is a contractual obligation of one party to compensate for the loss incurred by another party due to the acts of a third party or one's own actions.