When it comes to Construction Law in Jacksonville, Tampa, or St. Pete, knowing how to navigate the fine print in a construction contract can make or break your project. At Bachara Construction Law Group, our attorneys regularly help Florida contractors, subcontractors, and developers understand the legal terms that affect payment, liability, and dispute resolution—before they become problems.
In this article, we’ll break down six of the most important clauses you’ll encounter in a commercial construction contract—and what they actually mean for your business.
1. Flow-Down Clauses: Risk That Travels Downstream
A flow-down clause pushes all of the general contractor’s obligations in the prime contract down to the subcontractor. The risk? You could be agreeing to terms you’ve never even seen.
“Most subcontractors don’t realize they’re legally bound to the terms of a prime contract they’ve never read,” notes Hugh Higgins, managing partner at Bachara’s St. Pete office.
Tip: Subcontractors should always request a copy of the prime contract before signing—and negotiate protections that limit liability only to their scope of work.
2. Liquidated Damages for Delays: Helpful or Harmful?
Liquidated damages clauses define a fixed amount you’ll pay for each day a project runs late—$1,000, $10,000, or more depending on the size and complexity of the job.
While they can reduce litigation risk by eliminating debates over damages, courts will reject them if they act more like penalties than fair compensation.
“If your work doesn’t delay the critical path of the project, you shouldn’t be liable for liquidated damages,” says Chip Bachara. “And documentation is your best defense—daily logs, crew reports, and delay notices matter.”
3. Pay-if-Paid Provisions: When Payment Depends on the Owner
Pay-if-paid clauses are among the most controversial in construction law. These provisions state that a GC only has to pay subcontractors if the owner pays them first.
This protects GCs from owner non-payment, but it can put subs in a financial bind—even if they’ve done everything right.
“Subcontractors don’t have visibility into the owner’s finances,” Higgins explains. “They’re taking on risk they can’t evaluate. If you’re a sub, don’t agree to be the fallback lender.”
4. Defense and Indemnity: Watch for the Blank Check
Many contracts require subcontractors to defend and indemnify the GC—even for issues that aren’t their fault. These clauses can be financial landmines, especially when they lack limits or statutory language.
“Indemnity means paying damages. Defense means paying legal fees. And if your contract requires both—without limits—you’ve just written a blank check,” Bachara warns.
Florida law requires very specific language for indemnity clauses to be enforceable. If you’re not sure what you’re signing, it’s time to get legal advice.
5. Dispute Resolution: Arbitration vs. Litigation
When a dispute arises, the contract determines whether it’s resolved in court or through arbitration. Both options have pros and cons:
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Arbitration is private, often faster, and uses industry professionals as decision-makers—but it’s expensive and binding.
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Litigation offers more tools for compelling evidence, but it’s public and often slower.
Pre-suit mediation is also increasingly common and can be a helpful tool if both parties are motivated to settle.
Whether you’re in a contract dispute in Jacksonville or Tampa, you need to know up front who’s resolving it and how.
6. Attorney’s Fees: Who Pays?
Florida follows the American Rule, meaning each party pays its own legal fees, unless the contract says otherwise. A well-drafted contract should clarify:
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If the prevailing party gets legal fees
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Whether it applies to all disputes or just unpaid invoices
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If the provision is mutual or one-sided
Contractors should also consider how this interacts with Florida’s lien law (Chapter 713), which grants attorney’s fees to parties who prevail on a construction lien claim regardless of contract language.
Final Thoughts
Whether you’re a GC or subcontractor, understanding your contract’s terms can be the difference between profit and loss. The attorneys at Bachara Construction Law Group bring decades of experience in Construction Law in Jacksonville, Construction Law in Tampa, and Construction Law in St. Pete. We know what works, what’s enforceable, and how to protect your interests.
Have questions about your construction contract?
Don’t wait until a dispute arises. Contact us today to schedule a consultation and get the legal clarity you need..
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