Why You Should Have an Attorney Review Your Minnesota Construction Contract
Construction contracts are rarely made up of stand-alone provisions.
A payment clause can affect a dispute clause. A notice requirement can affect a claim deadline. A deleted paragraph can change how another section operates.
That is why contract review should be about more than spotting obviously bad terms. The agreement needs to work as a whole.
A recent Minnesota Court of Appeals case offers a useful example.
What Happened in Commercial Drywall v. Povolny Group?
In Commercial Drywall, Inc. v. The Povolny Group, Inc., a general contractor and subcontractor had entered into an agreement containing, among other things, a dispute-resolution process.
The subcontract originally included a procedure requiring the subcontractor to submit a claim, receive a decision from the contractor, and then make a timely demand for further relief. If that process was followed, the agreement provided for arbitration.
But part of that process had been deleted from the subcontract.
The arbitration language remained.
When a payment dispute later arose, the general contractor sought to compel arbitration. The Minnesota Court of Appeals affirmed the district court's decision refusing to compel arbitration because the contractual procedure that triggered arbitration no longer functioned as originally written.
The opinion is nonprecedential, which means it should not be treated as a new rule governing every Minnesota construction contract. But the practical lesson is valuable.
Contract Changes Do Not Happen in Isolation
Construction agreements often contain cross-references, defined terms, deadlines, notice requirements, and procedures that depend on and reference one another.
Deleting one paragraph may seem straightforward.
But what happens if another section says:
"subject to Section 12";
"after completion of the procedure above";
"within 20 days of the contractor's decision"; or
"as required under Paragraph 7.3"?
If the referenced language has been deleted or substantially rewritten, the remaining provision may no longer operate the way either party intended.
This is especially easy to miss when contracts go through several rounds of redlines.
This Is Bigger Than Arbitration Clauses
The same problem can arise throughout a construction agreement.
For example, edits can impact:
Payment provisions.
Changing when payment becomes due may conflict with retainage language, invoicing requirements, or provisions dealing with disputed work.
Change-order procedures.
A contract might require written authorization in one section but contain different notice requirements elsewhere.
Claims and notice deadlines.
Removing or revising a notice provision can change the procedure for submitting additional costs, delay claims, or other requests for compensation.
Termination provisions.
A change to cure periods or notice requirements can impact when a party actually has the right to terminate.
Dispute resolution.
Arbitration, mediation, venue, attorney-fee, and claims procedures often depend on other sections of the agreement.
The individual edit may make sense. The problem is what that edit does to everything around it.
Be Careful With "Just One Change"
"The other contractor let us delete this last time."
Sometimes those changes are perfectly reasonable.
But even a small revision should be checked against the remainder of the agreement.
This is one reason copying language from another contract can also create problems. A clause that works in one agreement may rely on definitions, procedures, or other provisions that do not exist in the contract where it is being inserted.
Attorney Review Is About More Than Finding Bad Clauses
A construction attorney reviewing an agreement is not only looking for provisions that favor the other side.
The review should also consider questions such as:
Do the provisions work together?
Are deadlines and notice requirements consistent?
Do cross-references still point to the correct sections?
Does the dispute process actually function from beginning to end?
Do the contract documents contradict one another?
Have revisions created gaps or unintended consequences?
Does the agreement reflect how the parties actually operate?
Those issues are much easier to address before the agreement is signed than after a dispute begins.
Review the Agreement Before the Problem Exists
Nobody wants to discover during a payment dispute that a contract provision does not work the way everyone thought it did.
Before signing a new construction agreement, particularly one that has been heavily negotiated or redlined, consider having your construction attorney review the final document as a whole.
And if your business regularly uses the same subcontract, master agreement, proposal, or terms and conditions, periodic review is worthwhile too.
Your documents should grow with your business.
A contract that worked five years ago may no longer reflect your projects, your processes, or the risks your company faces today.
North Star Law works with Minnesota construction businesses on contracts, risk management, and business documentation. For businesses that regularly negotiate subcontracts, vendor agreements, and other operational documents, ongoing legal review can also help keep contract language consistent across projects.
If you are not sure whether your agreements still work together the way they should, now is a good time to take another look. Contact us to learn more.