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Contracts serve to govern how a concrete contractor does its job, and whether or not the job will be profitable. Navigating contracts and agreeing to terms that meet each party's needs can be difficult, especially considering that a construction contract can be up to 100 pages long. The subcontract can also reference and incorporate the terms and conditions of preceding documents, such as the prime contract and/or bid proposal which can be up to 500 pages in length.

Usually the terms of the prime contract cannot be changed, but sometimes the subcontract can be negotiated. Because of this, concrete contractors need to review and be familiar with the contract's terms to protect themselves from conflicts that might arise down the road. Here are 10 common terms every concrete contractor should watch for when entering into a contract:

1. Order of precedence

Typically, when multiple contract documents are used, they will contain an order of precedence. This order determines how the documents' provisions are interpreted and states which terms govern when there is confusion or contradiction between contract terms. More often than not, the purchase order is the controlling document, followed by the request for bid, and then the contractor's bid. It is important to be familiar with the order of precedence because a term may be defined one way in the contractor's bid, but it may be overruled by a different document.

2. Dispute resolution

Many times, construction contracts require dispute resolution to be handled through an arbitration proceeding instead of a formal lawsuit. There are times when this can be advantageous, such as in particularly complex construction, but there are times when this is detrimental. For instance, if a contractor institutes an arbitration with the American Arbitration Association for an unpaid contract balance above $1 million, the filing alone will cost $13,250. While this fee is only 1 percent of the sum at issue, it is much larger than a typical court filing fee of $100. Additionally, parties pay all arbitration costs, including the hourly rates of arbitrators, which, collectively, can exceed $1,000 per hour. Examine whether or not arbitration would be beneficial each time you enter into contract.

3. Jurisdiction

Contracts usually specify jurisdiction in the event that a project goes poorly and the parties end up in litigation. It is not unusual for a contract to specify jurisdiction in a state that is most convenient for the party that drafted the contract — typically, the project owner. Consider jurisdiction when weighing the pros and cons of a contract as this can increase the cost of litigation.