Contracts & commercial

Contra Charge

A cost incurred by one party because of another’s default, deducted from money otherwise due to them — cleaning up after a subcontractor, remedying its defective work, or covering attendance it should have provided.

Contra charges are legitimate and routinely abused. The legitimate version is documented, notified, and priced at actual cost: you did not remove your waste, we did, here is the invoice, here is the photograph, here is the notice we sent first.

The abused version appears at final account as a large round number with no supporting record, deployed as a negotiating position against a subcontractor with weaker cash flow. It is worth knowing which one you are receiving — and, if you are issuing them, worth knowing that an undocumented contra charge tends not to survive scrutiny.

See also