During any type of construction project, contracts and written agreements are made between owners and contractors to ensure the satisfactory completion of a project. Occasionally, contractors will sub out a portion of the work. When this arrangement is made, the responsibility of the contractor to deliver satisfactory work is extended to the sub by way of a flow down clause. A flow down clause not only incorporates the sub-contractor into the agreement between a contractor and the owner, but it also serves to outline remedies, rights and responsibilities of a contractor-subcontractor relationship.
Nearly every construction contract incorporates a flow down clause to cover work done by subcontractors. These clauses are a step-by-step approach to project completion ensuring that the owner's expectations of quality are met. An effectively written flow down clause can ensure that a project is completed as it was intended to be. Many times, these flow down clauses are written in a very broad and general manner. These clauses essentially state that the subcontractor is held in agreement with the general contractor to the same magnitude as the general contractor is held to the owner.
A well-written flow down clause can include provisions identifying how sub-contractors are expected to comply with and deliver their work in line with the terms of the agreement. These clauses may also include an outline of payment arrangements, termination of work, schedules and insurance coverage requirements. Comprehensive clauses will also include steps to be taken if a dispute arises.
By providing subcontractors and contractors with the complete outline offered in a flow down clause, many disputes can be resolved without litigation. Unfortunately, even with the most comprehensive construction contract, issues may arise. When disputes cannot be resolved through the steps outlined within a flow down clause, contractors, subcontractors and owners may wish to speak with an experienced attorney. With their help, the litigation process can be initiated, and construction disputes can be resolved.