The One Contract Mistake That Cost a Contractor His Company

Sep 8, 2025

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Karalynn draws on her decades of experience to explain how overlooking contracts can cost businesses everything. Her book, Quit Getting Screwed, was inspired by watching a client lose his business simply because he didn't understand the contract he signed.

Today, she shares crucial tips for protecting yourself before you sign on the dotted line.

Key Takeaways

1. Many subcontractors sign commercial contracts without fully understanding their terms, leading to serious risks, including losing their business. It's crucial to know what you're signing so you can protect yourself from unfair terms and unforeseen obligations.

2. Over time, the lack of negotiation and blind trust in the contracting process has led commercial subcontracts to heavily favor general contractors. Subcontractors must recognize this imbalance and actively engage in understanding and negotiating contract terms to avoid being at a disadvantage.

3. Submitting a turnkey bid (a lump sum for all work) can get you into trouble if you accidentally leave out tasks, as you can be legally obligated to complete missing items for no additional pay. An itemized bid protects you by clearly listing what's included in your price, reducing unexpected obligations.

4. When you receive the subcontract, always check the scope of work against your original bid. Do not assume they match—general contractors may include more work than you quoted. If there are discrepancies, you must address them before signing, or you may be legally required to perform unpaid extra work.

5. If the contract's scope of work is broader than your bid, immediately notify the general contractor in writing and request the appropriate adjustment in price and contract documents. Never rely on promises to fix things "later"; always get changes formalized before signing to protect your business interests.