The Law Offices of Paul H. Appel – Your Trusted Business Law Partner in New Jersey
General Contractors · New Jersey
A general contractor answers to the owner for everything that happens on site while depending on subcontractors it does not fully control. The firm helps GCs negotiate prime contracts, manage changes and delays, and resolve owner disputes without losing the job or the margin.
The GC's position
On a typical private project the owner signs one agreement with the general contractor, and the GC then signs separate agreements with every trade. If the owner's design changes, the schedule slips or a payment arrives late, the GC is the party legally obliged to absorb it upstream and pass it on downstream, often under contracts with different wording.
That middle position is what makes the prime contract so important. Its change, notice, delay and payment clauses set the GC's rights against the owner. If the subcontracts do not mirror those clauses, the GC can end up owing its subs money it has no right to collect from the owner. Paul reviews both sides together so the risk the GC accepts at the top is matched by the protection it obtains below. The subcontract side is covered in more depth on the page about GC and subcontractor agreements.
This work forms part of the firm's wider construction law practice for New Jersey contractors.
Core issues
Prime contracts
Owners and their architects frequently start from heavily modified standard forms. The review focuses on payment timing, retainage release, indemnity scope, termination for convenience, and whether the GC can stop work if payment stops.
Change orders
Most prime contracts require written, signed change orders before extra work begins. When owners give verbal directions on site, the GC needs a fast way to document them so the claim is not later waived.
Delay claims
Delay clauses decide whether the GC gets more time, more money, both or neither. Notice provisions are usually the battleground: a valid claim can be lost because notice was late or informal.
Owner disputes
When an owner withholds a progress payment, alleges defects or threatens to terminate, the GC's response in the first few days often shapes the rest of the dispute.
Change and delay scenarios
These are common situations on private commercial work. The right answer always turns on your contract's wording, so treat this as a starting point.
| Situation | What usually controls | Practical first move |
|---|---|---|
| Owner's representative orders extra work verbally | The change-order clause and who has authority to approve changes | Confirm the direction in writing the same day and ask for a signed change order before or promptly after starting |
| Owner disputes the price of a change | Pricing methods in the contract (unit prices, cost-plus, negotiated sum) | Proceed if the contract requires it, track costs separately and reserve rights in writing |
| Late design information pushes the schedule | Excusable-delay and extension provisions, plus any no-damages-for-delay clause | Give the notice the contract requires, in the form it requires, and update the schedule |
| Owner assesses liquidated damages at closeout | The liquidated damages clause and whether time extensions were requested | Assemble the delay record and the extension requests before responding |
| Owner withholds a progress payment over alleged defects | Payment, withholding and dispute provisions | Request the specific basis in writing and separate undisputed amounts from disputed ones |
Some contracts contain clauses that bar delay damages entirely. Between private parties these are often enforced as written, subject to limited exceptions, so whether one applies to your job is a question for a careful contract review.
When an owner dispute starts
Collect the contract, approved and pending change orders, schedules, meeting minutes, photos and pay applications before memories and email threads drift.
Identify contractual notice periods, claim procedures and any lien filing window, which runs from the last date of work regardless of negotiations.
Review what the GC owes its subs and what notices must go to them, so the GC is not squeezed from both directions.
Present the claim to the owner with the supporting paper, propose a resolution and, if the contract calls for it, move to mediation or arbitration.
Before you sign the next prime contract
If any of these are missing, one-sided or unclear, raise them before signing rather than after the first problem.
For a clause-by-clause look at the documents themselves, see the firm's page on drafting and reviewing construction contracts.
Questions & answers
First check whether the contract obliges you to proceed while a change is disputed. Many do. If so, perform the work under a written reservation of rights, keep the cost records separate and submit the claim using the procedure the contract specifies. Stopping work without a contractual right to do so can turn a pricing disagreement into a default that hurts the GC far more.
It depends on the contract. If it contains a liquidated damages clause, the owner may try to deduct a daily amount for late completion. The GC's response usually turns on whether the delay was excusable, whether time extensions were properly requested, and whether the owner itself caused part of the delay. Documentation of each of those points matters more than the overall story.
Often, yes, at least between private commercial parties, although courts have recognized narrow exceptions, for instance for certain kinds of active interference, and public contracts are subject to separate statutory limits. Because the outcome depends on the clause wording and the cause of delay, contractors should negotiate these clauses before signing rather than rely on an exception later.
Quickly and carefully. Read whether the notice claims termination for cause or for convenience, check the cure period the contract allows, and respond in writing addressing each alleged default. Preserve photographs and records of the site condition at the time. The response window can be short, so contact counsel as soon as the notice arrives.
Your attorney
Every matter at the firm is handled personally by Paul — the same attorney reads the documents, gives the advice and negotiates on your behalf.
Contact
Describe what the business is dealing with — a contract on your desk, a deal in progress, a dispute or a company you are about to form. You will hear back from the attorney who handles the work.
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