Construction contracts are rarely “standard”—and even routine-looking terms can carry major consequences when something goes wrong. After two decades of resolving construction disputes, one pattern is clear: overlooked clauses at the signing table often resurface as major problems in litigation.

Among the most frequently misunderstood is the third-party beneficiary (TPB) clause. This seemingly minor provision can determine whether an owner can directly sue a subcontractor—or whether they’re left navigating a longer, more complex chain of claims. What’s more, default TPB language in widely used contract forms, like those from the American Institute of Architects, often limits or waives those rights altogether.

Protect your project and your rights. When negotiating your next construction contract, consider drafting your own TPB clause to clarify—and preserve—direct rights of action.

Read my latest column in the Daily Journal of Commerce for a deeper look at the risks and real-world consequences of leaving TPB clauses to chance.