Roofing Contracts in a Tight Market
Five Provisions Contractors Should Revisit
by Trent Cotney, Partner, Adams & Reese, LLP
(Editor’s Note: Trent Cotney, partner at Adams & Reese, LLP, is dedicated to representing the roofing and construction industries. Cotney is General Counsel for the Western States Roofing Contractors Association and several other industry associations. For more information, contact Cotney at (866) 303-5868 or go to www.adamsandreese.com.)
As competition for roofing work increases, contractors naturally focus on backlog, pricing, labor, and material availability. But a tight market creates another risk that is easier to overlook: contract terms tend to get worse when contractors become more aggressive about winning work. A strong backlog can give a contractor leverage to push back on bad language. A softer market can have the opposite effect. Contractors may accept provisions they would normally reject simply because they want the project. That decision can turn a profitable job into a problem long after the bid is awarded.
Before signing the next contract, roofing contractors should take another look at five provisions that routinely create unnecessary exposure. The objective is not to eliminate every risk. That is impossible. The objective is to understand the risk, allocate it fairly, and avoid accepting obligations that the contractor cannot reasonably control.
1. Payment Terms
The first question should always be simple: When do I get paid? Payment provisions often look straightforward until they are read together with retainage, invoicing requirements, conditions precedent, owner payment provisions, and waiver language. A contractor may think payment is due within 30 days, only to discover that the contract requires additional documentation or ties payment to an event outside the contractor’s control.
Pay-if-paid and pay-when-paid provisions also require close attention. Their enforceability varies by jurisdiction, and the wording matters. Contractors should understand whether they are merely agreeing to wait for payment or actually accepting the risk that the owner never pays the general contractor. The goal is predictability. Contractors should know what triggers payment, when payment becomes due, and what rights they have if payment does not arrive.
2. Price Escalation & Material Availability
Material pricing and availability remain major concerns for the roofing industry. Yet many contracts still place escalation risk almost entirely on the contractor. A good escalation provision should address significant increases in roofing materials, insulation, fasteners, adhesives, fuel, tariffs, transportation, and other project inputs. Contractors should also consider what happens when a specified product becomes unavailable or subject to an extended lead time.
The contract should provide a mechanism for an equitable adjustment in price or time when these conditions fall outside the contractor’s reasonable control. Without that language, the contractor may end up absorbing an increase that was impossible to predict at bid time.
3. Delay & Schedule Provisions
Roofing contractors frequently work near the end of the construction schedule, which means they often inherit problems created by those who came before them. Despite that reality, contracts may require strict compliance with the project schedule while limiting recovery for delay. Some include no-damages-for-delay clauses, aggressive notice requirements, or liquidated damages.
Roofers should avoid accepting responsibility for delays they do not control. The contract should address weather, access restrictions, other trades, owner changes, material shortages, labor disruptions, governmental action, and similar events. Contractors also need to follow contractual notice requirements. A legitimate delay claim can disappear because timely written notice was not provided.
4. Indemnity & Consequential Damages
Indemnity provisions can create liability far beyond the value of the roofing contract. Contractors should look closely at whose negligence they are being asked to cover and whether the provision extends to claims caused by the owner, general contractor, design professional, or other parties. State law may restrict certain indemnity provisions, but contractors should not assume a problematic clause will simply be unenforceable.
Consequential damages deserve similar attention. A roof leak can lead to allegations involving lost operations, damaged inventory, tenant claims, lost revenue, or other substantial losses. A mutual waiver of consequential damages can help keep the contractor’s exposure proportional to the work performed.
5. Change Orders & Extra Work
Few roofing disputes begin with someone saying, “Let’s create a claim.” They usually begin with someone saying, “Go ahead and do the work, and we will figure out the paperwork later.” That is exactly where trouble starts.
Contracts should clearly identify who can authorize additional work and how changes affect price and time. Field personnel should understand that verbal directives, texts, and informal conversations may not satisfy contractual change-order requirements. When immediate action is necessary, document the directive, work performed, cost impact, and schedule impact in writing. Good documentation provides leverage when memories change later.
The Bottom Line
A tight market is not the time to relax contract standards. It is the time to become more disciplined. Winning a project with unfavorable contract language is not necessarily a win. Roofing contractors should identify unacceptable risks before signing, negotiate where possible, and price the remaining risk into the work. Contractors should also make sure project managers understand the provisions that matter after execution. The best time to address a contract problem is before the first crew arrives on the roof.
