Flow-Down Clauses in Construction Contracts: Key Negotiation and Drafting Considerations for Primes and Subs
Flow-Down Terms; Mandatory vs. Discretionary Clauses; Common Contractual Conflicts and Litigated Issues
Recording of a 90-minute CLE video webinar with Q&A
This CLE webinar will provide an in-depth look at the powerful, though often overlooked, flow-down clauses in construction contracts that bind subcontractors to the terms and conditions of the prime contract. The panel will address the mistakes that many practitioners make when drafting these clauses and consider examples in recent case law of pitfalls to avoid. The panel will discuss negotiation and drafting strategies to protect the rights of prime contractors and subcontractors and offer best practices for mitigating client risk.
Outline
- Introduction
- Purpose of flow-down clauses
- Typical flow-down terms
- Filling gaps between the prime and subcontracts
- Risk-shifting
- When to use flow-down clauses
- Mandatory
- Discretionary
- Prime contractor considerations
- Subcontractor considerations
- Common contractual conflicts and litigated issues
- Best practices to mitigate risk for the parties
Benefits
The panel will review these and other key considerations:
- What is the purpose of a flow-down clause?
- When are flow-down clauses mandatory? When are they discretionary?
- What are typical flow-down terms?
- What documents should counsel review when negotiating the flow-down clause to ensure their clients are not subjected to obligations of which they are not aware?
- How can counsel best limit conflicts between the subcontract and the prime contract?
- How may using a precedence clause limit contractual conflicts between the parties?
Faculty
James T. Dixon
Partner, Co-Chair Construction Contracting & Disputes Practice Group
Brouse McDowell
Since 1997, Mr. Dixon has helped members of the construction industry manage risk, avoid loss, and resolve disputes on... | Read More
Since 1997, Mr. Dixon has helped members of the construction industry manage risk, avoid loss, and resolve disputes on projects throughout the country. He drafts and negotiates construction contracts, advises clients during the course of construction, and resolves disputes through mediation, arbitration and litigation. He has handled claims relating to defective construction, schedule delay, disruption and acceleration, differing site conditions, unapproved change orders, payment and performance bonds, and mechanic’s liens, among others. Mr. Dixon has unique experience in advancing bid protests on public projects, in resolving disputes on tunneling projects, and in addressing disputes on projects utilizing the integrated project delivery system. He also resolves transactional real estate disputes in residential and commercial contexts.
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Teresa Santin
Partner, Co-Chair Construction Contracting & Disputes Practice Group
Brouse McDowell
Ms. Santin primarily practices construction litigation, resolving disputes arising from public, industrial, commercial... | Read More
Ms. Santin primarily practices construction litigation, resolving disputes arising from public, industrial, commercial and residential projects. She represents general contractors, subcontractors, owners, developers and public entities in disputes involving construction agreements, unjust enrichment, mechanic’s liens and statutory violations. Ms. Santin frequently litigates claims of poor workmanship, incomplete or incorrect work, defective construction, schedule delay, unapproved change orders, payment and performance bonds and mechanic’s liens. She has significant experience resolving matters through alternative dispute resolution, particularly arbitration. Ms. Santin is a frequent author and lecturer on construction law topics.
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