What is a pay-if-paid clause in construction contracts?

A pay-if-paid clause makes the general contractor's obligation to pay the subcontractor conditional on receiving payment from the owner. If the owner doesn't pay, the subcontractor may have no legal right to collect. Pay-if-paid is void in California, New York, North Carolina, and several other states. SubShield automatically detects these clauses and tells you if they're enforceable in your state.

What is broad indemnification in construction contracts?

Broad form (Type I) indemnification requires the subcontractor to indemnify the general contractor even for the GC's own negligence. This creates unlimited liability exposure. Over 40 states have anti-indemnity statutes that void these clauses. SubShield identifies them and cites the specific statute that voids them in your state.

How does SubShield analyze construction contracts?

Upload your subcontract (PDF, Word, or paste text) and SubShield's AI analyzes it in about 60 seconds. You get a risk score (1-10), identification of 50+ risky clause types, negotiation language to propose to your GC, and state-specific legal information.

Is SubShield a substitute for a construction attorney?

No. SubShield is an AI-powered educational tool that helps subcontractors understand their contracts better. For high-value contracts ($500K+) or complex disputes, consult a licensed construction attorney. SubShield costs $47 per analysis; attorney review costs $300-500+. Use SubShield for initial screening, attorney for final review.

What states does SubShield cover?

SubShield provides analysis for all 50 US states with specific knowledge of state lien laws, anti-indemnity statutes, prompt payment act requirements, retainage caps, and pay-if-paid enforceability which varies significantly by state.

How much does SubShield cost?

SubShield offers a free trial with one full analysis per month. Single reports cost $47. Pro Monthly is $97/month for unlimited analyses. Pro Annual is $797/year for unlimited analyses. All paid plans include a 60-day money-back guarantee.

What is a no-damage-for-delay clause?

A no-damage-for-delay clause prevents the subcontractor from recovering monetary damages when the project is delayed, even if the delay was caused by the GC. The only remedy is a time extension, not compensation for increased costs. These clauses can cost subcontractors $23,000+ on average. SubShield detects these clauses automatically.

How is SubShield different from using ChatGPT to review contracts?

SubShield is purpose-built for construction subcontracts with 50+ clause type detection specific to construction, state-specific legal information for all 50 states, industry benchmarks (AIA, ConsensusDocs standards), negotiation language templates, and a GC reputation database. General AI tools lack this specialized construction knowledge.

15 Contract Negotiation Tips Every Subcontractor Should Know

You don't have to accept every term in a subcontract. Here are 15 practical tips for negotiating better deals.

1. Everything is Negotiable (Yes, Really)

GCs expect pushback. That "standard contract" isn't standard—it's their wish list. Most will negotiate on:

Payment terms

Retainage percentage

Warranty periods

Insurance requirements

2. Ask for the Prime Contract

You have a right to see the relevant portions of the prime contract. Red flags in the prime flow down to you.

3. Redline, Don't Rewrite

Make specific changes to their document rather than proposing your own. GCs are more likely to accept modifications than start over.

4. Focus on the Big Five

If you can only negotiate five things, make it:

Payment terms (pay-if-paid → pay-when-paid)

Indemnification (broad → limited)

Change order procedures

Warranty period

Dispute resolution

5. Get It in Writing

Verbal agreements mean nothing. If someone says "we never enforce that clause," ask them to strike it.

6. Know Your State's Laws

Many contract terms are void or limited by state law. Pay-if-paid clauses are unenforceable in California, so don't waste negotiating capital there.

7. Use "Insurance Won't Cover This"

Magic words: "My insurance won't cover that." It's often true and gives the GC a reason to modify terms.

8. Propose Alternatives, Not Just Rejections

Instead of: "I won't accept this warranty period." Try: "The warranty should match the manufacturer warranty of 1 year."

9. Watch for Scope Creep Language

Beware of:

"All work necessary for a complete installation"

"Including but not limited to"

"As directed by Contractor"

These phrases can expand your scope beyond your bid.

10. Protect Your Lien Rights

Never sign a contract that waives lien rights before payment. This is often hidden in "administrative" sections.

11. Add a Flow-Down Limit

If the prime contract terms flow down, add: "Only to the extent applicable to Subcontractor's scope of work."

12. Negotiate Retainage

10% retainage on a $500K contract = $50,000 of your money held hostage. Push for:

5% maximum

Reduction to 0% at 50% completion

Release within 30 days of sub completion

13. Include Dispute Resolution

Arbitration is usually faster and cheaper than litigation. Make sure venue is reasonable (not across the country).

14. Set Change Order Timeframes

Add language requiring GC response to change order requests within 14 days. Silence = approval.

15. Know When to Walk Away

Some contracts aren't worth the risk. If a GC won't negotiate on deal-breakers, find a better client.

---

Before Your Next Negotiation

Run your contract through SubShield to identify exactly which clauses need attention. Our AI highlights risky terms and provides specific negotiation language.

---

*What negotiation tips have worked for you? We'd love to hear—email us at hello@trysubshield.com.*

15 Contract Negotiation Tips Every Subcontractor Should Know

15 Contract Negotiation Tips Every Subcontractor Should Know

1. Everything is Negotiable (Yes, Really)

2. Ask for the Prime Contract

3. Redline, Don't Rewrite

4. Focus on the Big Five

5. Get It in Writing

6. Know Your State's Laws

7. Use "Insurance Won't Cover This"

8. Propose Alternatives, Not Just Rejections

9. Watch for Scope Creep Language

10. Protect Your Lien Rights

11. Add a Flow-Down Limit

12. Negotiate Retainage

13. Include Dispute Resolution

14. Set Change Order Timeframes

15. Know When to Walk Away

Before Your Next Negotiation

Ready to Protect Your Next Contract?

More Resources

Turner Construction Subcontract Analysis: What to Watch For

Lien Waivers in Construction: The Complete Guide for Subcontractors

Retainage in Construction: What Subcontractors Need to Know