Your bid exclusions can vanish when you sign the GC's subcontract as written
A subcontract that arrives after award and drops the exclusions in your proposal is, in contract terms, a counteroffer. Sign it unchanged and your bid usually stays out of the deal, according to construction law firms Truax Law Group and Spilman Thomas & Battle.
Contract law requires an acceptance to match the offer. A reply that changes the terms is a counteroffer and rejects the original, Spilman Thomas & Battle wrote in a review of case law in Ohio, West Virginia, Pennsylvania, Virginia and North Carolina. Your bid is the offer. A GC form with different terms is a counteroffer, and your signature accepts it. Ohio's Truax Law Group puts it plainly: a proposal that is not made an exhibit to the subcontract is not part of the deal.
That is how exclusions disappear. Truax gives the example of an electrician who excluded low-voltage work and then signed a subcontract whose scope just says electrical work, or one that pulls in every drawing sheet on the project. Ohio law treats documents referenced in the subcontract as though their text were pasted in.
Truax lists the clauses that hurt subs most. Pay-if-paid can leave a sub with no right to $150,000 of finished work if the owner never pays the GC. Others: lien waivers signed up front, changes-in-writing rules that turn unapproved extra work into free work, claim notice windows as short as 24 hours, extra pay only if the GC recovers from the owner, and indemnity for losses the sub did not cause. Warranty is another trap. AIA A201 starts the one-year clock when your own work is done, but many GC forms start it at final acceptance of the whole project, which can stretch it to two or three years for an early trade.
Refusing is an option. In Flintco Pacific v. TEC Management Consultants (2016), a California appeals court held that a GC's letter of intent demanding liquidated damages, retention and bonding was a counteroffer that the glazing sub, whose bid required a 35% deposit, could reject. The GC lost its claim for the price difference. States differ on holding subs to their bids: in Pennsylvania, a GC that relied on a bid can sue a sub that withdraws it, Spilman noted.
Why it matters: Before you sign, attach your proposal and its exclusions to the subcontract as an exhibit, and redline pay-if-paid, indemnity, warranty start and notice periods. If the GC won't move, you are pricing a different deal, so decide whether the number still works.
Sources
- Say What??!! When is There an Enforceable Agreement in the Subcontractor Bidding Process?Spilman Thomas & Battle, May 28, 2014
- Subcontract Bidder Excused from Executing Contract with Prime ContractorConstructionRisk, Jan 19, 2017
- 10 Commercial Construction Contract Nightmares for Subcontractors to AvoidTruax Law Group, Oct 23, 2024