Creating completion incentives for sub-contractors

[Dave Vona]

When creating a Independent Contractor Agreement I've seen where someone that is flipping properties will include terms around the completion time of the project. They'll include an incentive for completing the work on-time or early, and a (weekly or daily) penalty for not finishing on time. I can see this being useful when a General Contractor is involved but is this a strategy that can be used if you're utilizing sub-contractors for all the work. It's much more difficult to set individual completion timelines for each sub-contractor when there are so many dependencies between everyone working on the project. Does anyone have any thoughts on how this could be structured? Thanks.

[Greg Dickerson]

@Dave Vona you will have a hard time getting a GC or any subcontractors to agree to a penalty clause for remodels and custom homes. They will likely accept a bonus if finished ahead of schedule but not a penalty for missing deadlines. If they do you will likely pay for it in their quote. 

That’s more common in large commercial projects.