Contracts & ExecutionQuestion 217 of 1632

An owner-contractor agreement and a subcontract are kept consistent through:

a.An indemnity clause moving the prime's liability to the sub
b.A flow-down clause passing prime-contract duties to the sub
c.A pay-when-paid clause tying payment to the owner's payment
d.A no-damages-for-delay clause barring the sub's delay claims

Explanation

A flow-down (or conduit) clause incorporates the prime contract's relevant terms into the subcontract, so the sub owes the general the same obligations the general owes the owner for that scope. An indemnity clause allocates liability for claims; it does not import the prime contract's terms. A pay-when-paid clause governs only the timing of payment. And a no-damages-for-delay clause limits one remedy. None of those three keeps the two contracts consistent.

Law Reference: Flow-down/conduit clause (industry practice); Civil Code §2782 (indemnity limits)

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