A Proposed Contract May Bind You Even If You Don’t Sign
A frequent occurrence on construction projects (once the economy turns and new projects actually begin again) is when one party presents a proposed contract to another for signature and the recipient fails to sign it, but begins working on the job anyway. You may be surprised to know you may still be bound to the contract terms even if you never sign the agreement. The contract may bind you if your acts, conduct or performance on the job suggest you agreed to its terms. In other words, even if you don’t sign a contract, you may nevertheless be bound to its provisions if you act as though the contract was in force (submit pay requests in accordance with the contract’s draw schedule, conduct job site meetings as called for in the contract, submit change order requests to the person identified in the contract to receive them, etc). In fact, case law goes so far as to make an arbitration clause in an unsigned contract binding if the court finds the parties consented to other terms in the agreement. Therefore, beware of the unsigned proposed contract. Either sign and return it or make your suggested changes to it, but if you simply ignore it, you do so at your own risk!