FEATURE
foot on the job site. Henry says there are several things
that he would have included in the contract, had it been
crafted correctly.
“First, you need to include the schedule. That’s number
one because it keeps everyone on the same page through-out
the job. Then, you need to determine the expectation
for the general contractor to take on liquidated damages.
For example, if the schedule isn’t made, are we expected to
shoulder the costs due to that schedule? There also must be a
detailed scope of the work to be done and terms of payment.
But another really important item is a reciprocal termination
clause. The general contractor will, most of the time, have
terms to terminate the contract if we’re not doing our job. A
lot of times, with newer contracts that are being drafted, they
remove our right to terminate. It’s a sticking point because
if they’re not paying us, we should be able to terminate the
contract,” he said.
Another often overlooked consideration when it comes
to protecting yourself and your company is correspondence
between your company and the general contractor.
“To protect ourselves, it’s really important to send prop-erly
worded emails,” said Henry. “(You need to) start early
with correspondence, saying that the work isn’t going well
and that there’s culpability on the other side. I think it’s
important to get some verbiage from your construction
lawyer, so you can protect yourself if you do end up needing
to terminate.”
Outside consult
Once the reliability and consistency of this particular job
began to falter, Henry says he relied heavily on his legal team
for advice and support.
“You don’t necessarily need a legal team to do everything.
But it is a good idea to seek their counsel when you start
seeing red flags. If you’re at the point where you’re sending
pretty pointed emails, but nothing is changing, you should
“I’ve learned to identify
the different types of jobs
out there and to identify
our rights and our risk for
each type of work. That
determines how we handle
the contract.”
– Don Henry, Henry Drilling
have the right to stop work and work something out. You
need to have some sort of recourse, definitely,” he said.
Henry recognizes that a solidified contract would have
helped the situation once significant delays became the
norm. However, visiting the job site would have also made a
huge difference to how this job turned out.
“Do not mobilize the site,” said Henry. “General contrac-tors
are under a hard schedule; they have significant skin in
the game for getting that work done on time. When you’re
mobilizing the site and starting the work then you’re invest-ing
money in the job. The key is not to get into the situation
where you’re already on site and invested in the job before
you have a contract that spells everything out.”
Change for the better
Henry Drilling eventually ended up walking away from the
job in question, but not without significant financial loss.
Although the lessons he learned may not make up for the
lost profit, Henry says he gained valuable experience from
the entire situation and applies that experience on each job,
every day.
“It’s important to have a contract signed before you mobi-lize
the site, as much as you can with each client you work
with. But we don’t have that with each client; it really depends
on the client and the work. So, it’s also about identifying your
risk with the client right off the bat. I’ve learned to identify
the different types of jobs out there and to identify our rights
and our risk for each type of work. That determines how we
handle the contract,” he said.
Hard lessons are tough to learn but are rarely repeated.
In Don Henry’s case, such a lesson became a learning expe-rience
that has made him and his team stronger and more
resilient. Henry shares his experience with the hope that
others can learn from him and build their own resilience and
strength for when hard lessons – or rather, rough seas – come
their way.
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