In this series of articles, we examine various “onerous clauses” commonly found in construction subcontracts. Onerous clauses are unfair clauses that both shift the risk on a construction project to the party least able to bear it and conflict with the reasonable expectations of the same party. The purpose of these articles is to discuss the purpose and effect of onerous clauses and suggest some means of avoiding them. Nevertheless, the advice of a construction lawyer should be sought to identify and modify onerous clauses prior to signing any subcontract.
Few clauses, if any, are more important to a subcontractor than the payment clause in a subcontract. The payment clause typically sets out:
1. the processes and documents required to apply for payment for the work performed; and