Why Roofers Need to Evaluate Their Contracts: Protecting Your Business

Update your Contracts! Protect Your Business

Author: Justin Shirley, RCAW President

In the roofing industry, having a well-drafted contract is crucial for protecting your business from potential disputes, misunderstandings, and legal complications. With the new year upon us, it’s an excellent time for roofers to review and update their contracts to ensure they reflect current laws, industry standards, and best practices. As I was researching this, I came across a few key elements roofing professionals should focus on for 2025.  

1. Stay Compliant with New Regulations 

Laws and regulations affecting the roofing industry are always changing. In 2024, there may be new state or federal requirements that impact your contracts, such as those related to labor laws, safety standards, and consumer protection. Evaluating your contracts ensures you are compliant with these regulations, reducing the risk of fines, penalties, or legal disputes. 

For example, if Washington state updates any requirements, you may need to include new disclosures in your contracts. Similarly, changes to WISHA/OSHA safety standards or environmental regulations may necessitate updates to your scope of work or safety clauses. 

2.  Clearly Define the Scope of Work 

A vague or poorly defined scope of work can lead to misunderstandings, delays, and disputes with clients. Make sure your contracts clearly outline the services to be performed, including specific details about materials, timelines, and any exclusions. This helps set clear expectations for your clients and minimizes the risk of conflicts over what is or isn’t included in the project. 

Updating your scope of work clause to reflect any new services, techniques, or materials your company will offer in 2024-2025 is a proactive step in maintaining transparency with your clients. 

3.  Address Pricing and Payment Terms 

Reviewing your pricing and payment terms is essential to ensure your contracts accurately reflect your current business costs and pricing strategy. Consider including clauses that address: 

• Payment Schedule: Outline clear milestones for payments, such as deposits, progress payments, and final payments upon completion. 

• Late Payment Penalties: Include terms for interest or penalties on overdue payments to encourage timely payments. 

• Cost Increases: Add clauses that allow for adjustments in the event of unforeseen material cost increases, particularly in volatile markets. 

By clearly defining payment expectations, you reduce the likelihood of payment disputes and maintain healthy cash flow throughout your projects. 

4.  Include Robust Liability and Insurance Clauses 

Roofing is inherently risky, and even with the best safety measures, accidents can happen. Your contracts should include comprehensive liability and insurance clauses to protect your business from potential lawsuits and claims. Make sure that: 

• Indemnification Clauses protect you from third-party claims arising from the client’s actions. 

• Waiver of Subrogation Clauses prevent insurance companies from seeking reimbursement from you after a claim is paid. 

• Certificates of Insurance are up-to-date and reflect adequate coverage amounts. 

Review these clauses to ensure they align with your current insurance policies and coverage levels. 

5.  Address Force Majeure and Delay Provisions 

Force majeure clauses protect you in the event of unforeseen circumstances that prevent you from fulfilling your contractual obligations, such as natural disasters, pandemics, or supply chain disruptions. Given the uncertainties that have impacted the industry in recent years, reviewing and updating these provisions is essential. 

Ensure your contract clearly defines what constitutes a force majeure event and specifies the procedures for notifying clients and adjusting timelines. Additionally, include delay provisions that outline what happens if a project is delayed due to factors beyond your control, such as weather or material shortages. 

6.  Consider Dispute Resolution Mechanisms 

To avoid costly and time-consuming litigation, consider including dispute resolution mechanisms in your contracts, such as mediation or arbitration. Clearly outline the process for resolving disputes, including timeframes, required notice, and the selection of neutral third parties. These clauses can save you time and money if a disagreement arises. 

7.  Protect Your Business with Warranty and Guarantee Clauses 

Warranties and guarantees help build trust with your clients, but they also create legal obligations. Ensure your contracts include: 

• Material and Workmanship Warranties that clearly state what is covered, the duration of coverage, and any limitations. 

• Exclusions that specify what is not covered under the warranty, such as damage due to client negligence or natural disasters. 

Author

RCAW Editor

Established in 1965, the Roofing Contractors Association of Washington continues to bring the roofing industry together to increase success through advocacy, continuing education, professional collaboration, and consumer awareness.