Negotiations with the Contractor: 7 Questions Before Signing for 100 Million

A client we’ve worked with on three projects once said something I wrote down: “I lost twenty-two million not on bad tile. I lost it on one line in the contract — ‘materials by mutual agreement.'” He meant his previous experience, before us. So when we sat down to discuss the finishing contract for our mansion project, he read each clause like the outcome of a war depended on it. In a way, it did.

Architecture changes faster than we think, but one thing has remained constant for thirty years: big money in private construction is lost not on the job site. It’s lost at the negotiating table, at the moment when the concept is approved, visualizations are signed off, and it seems the hard part is done. Actually, the hard part is just beginning. This is where the contractor gets or loses the leverage that will determine every decision over the next two to three years.

This article is a retrospective breakdown. I’ve collected seven questions that need answering before the pen touches the signature line. Each is not theory. Behind each stands someone’s loss. Sometimes in millions, sometimes in two years of life spent in a rental while the mansion is “just about to be ready.”

Why the finishing contract is the main battlefield, not a project appendix

There’s an illusion cultivated by everyone except lawyers: first we make the project, then we build the beautiful house. The contract is somewhere in between, a formality. In reality the contract is your house. Everything not written in it will be decided against you. Not because the contractor is evil, but because he has his own economics, his own cash-flow gaps, his own optimization logic. And it doesn’t align with yours.

When we’re talking sums of 80 to 300 million for finishing — normal range for a 800–1,500 m² Moscow region mansion — the contract stops being paper. It becomes an operations document by which hundreds of decisions will be made over two years. Every line is either your protection or an open door.

And here’s what’s interesting. Over twenty years I’ve seen maybe three hundred such contracts. Fewer than twenty were well-written from the client’s perspective. The rest — templates the contractor brought himself. Roughly like showing up to a duel and letting your opponent choose your weapon.

Question 1: What exactly does “premium-segment materials” mean?

Open almost any premium mansion finishing contract — you’ll find this phrasing. “Premium-class materials,” “materials per concept,” “analogues by mutual agreement.” This is not a contract. This is an invitation to improvisation.

Let’s break it down with specifics. The project specifies Calacatta Oro marble from a specific Carrara quarry, 20mm plate, book-matched layout. In the contract — “white marble with golden veins, premium segment.” Eight months later you get a Turkish analog for a third of the price, and formally the contractor is right. The difference goes in his pocket. Proving in court that you meant specifically Calacatta, not “white with gold,” is possible, but you’ll spend another year and several million on expert assessments.

What should be in the contract: article number, producer, collection, country, batch, thickness, format, processing type. A 40–80 page specification for a project at this level is normal, not overkill. If the contractor says “why so detailed, we’ll agree on everything as we go” — that’s the first red flag. “As we go” means they’re reserving room to maneuver.

Question 2: Who pays for contractor mistakes — and how do we prove it

Here’s a phrasing I see in nine of ten contracts: “Contractor bears responsibility for quality of executed work.” Sounds good. Useless.

What does “bears responsibility” mean? Will they redo it? At their expense? In what timeframe? With what materials — the same or whatever they can get? What if redoing requires dismantling adjacent structures built by another contractor — who pays for those?

From our practice: a crew laid engineered parquet over un-dried screed. After six months the parquet warped over 180 m². Demolition, new screed, moisture check, three-month waiting period, new laying — and all this with already-installed baseboards, door frames, built-in furniture on order. Direct losses — about 9 million. Ancillary ones, including schedule slippage — roughly the same. The contract said “quality execution.” The contractor agreed to relay the parquet. Everything else — client’s tab.

Proper language describes: remediation deadlines, material source for redoing, responsibility for adjacent work, schedule breach compensation via contractual penalties with specific sums per day. And — critically — a mechanism for independent assessment that the contractor can’t block.

Question 3: How is the estimate structured — fixed, open, or hybrid

This is the most underestimated point, because it looks like a technical detail but actually determines the whole philosophy of your relationship with the contractor.

Fixed estimate (firm price). The contractor names a sum, what happens next is his problem. Looks like client protection — actually the contractor bakes in 20–30% buffer for contingencies, which you pay regardless of whether they happen. Plus he’s incentivized to cut on materials.

Open estimate (cost plus). You pay actual expenses plus a contractor percentage, usually 10–18%. Transparent, but requires strict control of purchases and solid technical supervision. Without it becomes a festival of unprecedented generosity on your bill.

Hybrid. Labor on fixed rate, materials on open estimate with a ceiling. In our view, for 100+ million projects this is the only sensible model. But it requires careful legal structuring or you get the worst of both worlds.

The question to ask directly: show me the supplier invoices. Not “a report from accounting.” Actual bills from vendors. If the contractor won’t — he’s already factored in a margin that nobody will take back.

Question 4: Timeline — and what “force majeure” means in this contract

Classic story. The contract says 14 months for finishing. After 10 months it turns out “timelines shifted for objective reasons.” What’s objective? Everything listed in the force majeure section. And there, in template contracts, usually sits the phrase “including but not limited to.” This phrase is a legal funnel through which any responsibility disappears.

Timelines should be broken into stages with checkpoints. Minimum 8–12 milestones per annual project. Each stage — penalty for lateness in percentage of stage cost, typically 0.1–0.3% per day. And — obligatory — the client’s right to unilaterally terminate if key milestones slip more than 45 days, with work transfer to another contractor at the guilty party’s expense.

Force majeure should be a closed list. Wars, natural disasters, state acts interrupting work. That’s all. “Supplier delayed” is not force majeure, it’s the contractor’s operational risk, he pays for it.

Question 5: Who controls quality — and does he have actual authority

Technical supervision is not “a guy who sometimes drops by the site.” It’s a function with powers. Is it written in the contract?

At our studio, technical supervision has the right to halt work, refuse acceptance of concealed work, demand demolition of incorrectly done structures, request material certificates for any batch at any time. All this has to be documented — or supervision becomes a bystander whose observations the contractor can ignore.

A separate question — who hires the supervisor. If the contractor hires him, you get not supervision but decoration. The supervisor must be yours and only yours, or independent — via a specialized organization with a direct contract with you.

Question 6: How are changes during the project processed

Over a two-year 100+ million cycle there’s normally 40 to 120 changes. Changed the tile layout in the bathroom. Reconsidered the facade board color. Added an alcove for a speaker in the living room. Every change — money, time, new responsibility contour.

In a bad contract, changes are processed “by verbal agreement” or “via messenger discussion.” In a good one — each change requires a signed amendment specifying: what changes, by how much the price changes, by how much timelines shift, who bears risk for adjacent work.

Yes, it’s bureaucracy. Yes, it slows things down. But it’s the only way to understand at the end why the estimate grew from 110 to 147 million. Without amendments you get financial fog in which any complaint drowns.

Typical client mistakes at signature stage

I’ll gather in one place what I see regularly.

Misplaced trust. “We were referred, they have good projects, we agreed verbally.” Verbally is wonderful for friendship. For a hundred-million contract — disaster.

General-practice lawyer. You hire a family lawyer or corporate M&A specialist. Construction contracts — separate discipline with its own case law. You need a lawyer who’s seen minimum twenty similar disputes.

Haggling over price instead of terms. Client wrestles 7% off the estimate and counts it as victory. The contractor smiles and factors those 7% into future amendments. You should negotiate not price but protection: penalties, guarantees, audit rights.

No exit strategy. What do you do if in six months you realize you can’t work with this contractor? In most contracts, client-initiated termination means paying 15–30% compensation on remaining work. You should change this at signature time — later will be too late.

Faith in warranty. “We have a five-year warranty.” Read the fine print: warranty for what exactly, under what operating conditions, with what exclusions. Often it doesn’t apply to “natural wear,” “humidity effects,” “temperature deformation” — i.e., everything that can actually happen in a living house.

How we work with contracts at the studio

We’re not a legal firm, and I tell every client this honestly. But over years of practice we’ve assembled our own contract template for premium finishing, constantly updated with specialized lawyers. It doesn’t protect everything that exists — perfect contracts don’t exist. It closes seventeen typical loss scenarios we’ve seen on other people’s projects and our early ones.

When a client comes with a contractor they’ve chosen independently, we offer a legal audit of their draft contract. Sometimes we rewrite it completely. One time a client came back to us after the audit with: “They refused to sign your version. So we need a different contractor.” That was the healthiest outcome possible.

Our position is simple: a contract the contractor will sign without changes is suspicious. A contract fought over for three weeks works. Normal professional relationships start with honest negotiation of boundaries. Everything unspoken at the shore will definitely surface later — and always at the wrong time.

What remains in the sediment

We live in an era where a premium private house stopped being just real estate. It’s a long-term system: architecture, engineering, interior, garden, operations over twenty-thirty years ahead. And the finishing contract is not the final stroke but the foundation of relationships you’ll navigate for a couple of your tensest years.

If after reading this article you want to reread your contract — do it today. Not tomorrow. Better to find a problem in text than in a torn-up bathroom where tile turned out wrong, screed didn’t dry, and the contractor points to paragraph 7.3 which you skimmed.

If you need outside perspective — we’re always open for conversation. Sometimes two hours is enough to see what even an experienced client misses. And sometimes — to understand that it’s time to change not the contract, but the contractor.