The Hidden Contract Traps That Cost Millions
By Cope C. Thomas, Attorney • 25+ Years Fortune 500 Contract Experience
In my 25 years negotiating billion-dollar contracts at Fortune 500 companies like GE Energy, I’ve witnessed the same devastating pattern repeat itself: businesses hemorrhaging millions because of two seemingly innocent contract clauses that most people completely overlook.
An unclear description of the scope of work isn’t just a minor oversight—it’s a ticking time bomb that can destroy your profit margins and relationships overnight. While a well-drafted scope of work serves as the blueprint for smooth execution, a vague one becomes an invitation for misinterpretation, friction, and costly legal warfare.
Having closed over $100 million in energy infrastructure deals, I’ve seen how two of the most dangerous culprits—the deceptively innocent catch-all clause and the slippery efforts clause—can transform profitable projects into financial disasters.
What exactly is “reasonably inferable”? How far must “best efforts” go? Welcome to the gray zone, where ambiguity breeds disputes, delays, and financial disaster.
The $1 Million Mistake: When “Complete the Work” Goes Wrong
“I’ve seen this exact scenario destroy countless projects,” says Thomas, reflecting on a construction case that perfectly illustrates the devastating power of vague contract language.
The initial project budget and timeline for the construction of a new building was woefully inadequate because the design evolved and encountered unforeseen complexities. What started as a straightforward project projected to take 3 years and cost $1 million became a 4-year nightmare that ultimately cost $2 million—all due to complex design requirements, engineering challenges, and mismanagement that weren’t clearly addressed in the original scope.
The Result: 100% cost overrun, 33% time overrun, and irreparable damage to business relationships
Expert Analysis: “This is the predictable outcome when contracts include phrases like ‘all work necessary to complete the project’ without defining what ‘necessary’ means or who determines it. In my experience negotiating major energy infrastructure deals, I’ve learned that every undefined term is a potential lawsuit waiting to happen.”