Public Agencies Should Sign Contracts Last

When executing or signing contracts for construction or consultant services, it is important that the public agency sign the contract last, after the contractor or consultant has signed.

If the public agency signs first, it can lead to an ambiguous contract. Here's what can and does often happen when the public agency signs the contract first. The contract then goes to the contractor or consultant, who not only signs the contract, but makes handwritten or typed additions, deletions, or changes to existing language in the contract, maybe initialing the changes and maybe not initialing them.

If the public agency, upon review of the changes, decides they disagree with the modifications, both parties are faced with an ambiguous contract. There are signatures on the contract and maybe the initials of one party, but there has been no meeting of the minds if the public agency is not willing to initial the changes, or if the contractor or consultant has not initialed the changes. The parties have not mutually agreed to the terms of the contract.

What needs to happen next is negotiation and agreement on the language. Meanwhile, the contractor or consultant may have begun work based on the fact that they've signed the contract, even though it has changes to it that the public agency has not agreed to.

My advice is to always have the contractor or consultant sign the contract first. If they have changes they make to the contract, the parties can negotiate acceptable terms without leaving the status of the contract is such doubt since the public agency would not have signed the contract.

If the contractor or consultant hand-writes or types in changes that the public agency agrees with, those changes must be initialed by both parties in order to be effective. If there are too many changes, it is a much better idea to re-do the contract and incorporate the changes into the contract, rather than rely upon a marked-up contract.