Red Flag Clause #1: Vague Scope of Supply
Risks of Undefined Material Specifications
A contract that merely promises “supply of stone” invites disappointment: unknown grades, finishes, or yield. You risk receiving slabs that fail durability tests, display inconsistent veining, or fall short on quantity.
How to Define Clear Stone Grades, Finishes & Quantities
Specify exact trade names or geological classifications (e.g., Carrara Bianco “Venatino”).
Enumerate finishes (polished, honed, sand-blasted) with surface roughness tolerances.
Lock in quantities by square meters or linear edge meters, with a 5% overage allowance for cutting waste.
Callout digital mock-ups and sample-approval milestones to ensure mutual clarity.
Callout (Sample Clause Excerpt)—Scope of Supply:
“Supplier shall deliver 500 m² ±5% of ‘Grigio Carnico’ honed slabs at 20 mm thickness, as per approved mock-up #A1 dated 01/05/2025.”
Red Flag Clause #2: One-Sided Liability & Indemnity
Excessive Developer Liability Exposure
Some contracts require you to indemnify the supplier for any onsite damage—even beyond their control—while the supplier assumes minimal responsibility for defects.
Negotiating Balanced Indemnification Terms
Cap liability at the contract value or a multiple thereof.
Reciprocal indemnity: supplier covers your losses arising from material defects or delivery failures.
Exclude consequential damages to avoid open-ended exposure.
Callout (Sample Clause Excerpt)—Mutual Indemnity:
“Each party shall indemnify the other for direct damages arising from its breach, with liability capped at the total contract price; neither party shall be liable for indirect or consequential damages.”
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Red Flag Clause #3: Uncapped Delay & Liquidated Damages
Unlimited Penalties for Late Delivery
An uncapped LD clause may impose £1,000 per day with no ceiling, potentially exceeding material costs if a shipment is delayed by port congestion or force majeure.
Setting Reasonable Damage Caps & Extensions
Define maximum aggregate LD (e.g., 10% of contract value).
Allow excusable delays for force majeure, customs hold-ups, or natural disasters.
Include a cure period (e.g., five business days) before LD begin.
Callout (Sample Clause Excerpt)—Liquidated Damages:
“Supplier shall pay LD at £750/day, capped at 8% of total contract price, commencing 10 days after the agreed delivery date, excluding delays due to force majeure.”
Red Flag Clause #4: Ambiguous Warranty Provisions
Incomplete Coverage for Defects & Repairs
Contracts may offer a warranty limited to “manufacturing defects,” leaving gaps for color variation, moisture damage, or edge chipping.
Crafting Comprehensive Stone Performance Warranties
List covered defects: cracking, delamination, color fade, surface wear.
Set a warranty period commensurate with stone type (e.g., 5 years for interior surfaces, 10 years exterior).
Include on-site repair or replacement at supplier cost, including labor and shipping.
Callout (Sample Clause Excerpt)—Warranty:
“Supplier warrants slabs against structural and aesthetic defects for 10 years; replacements, including freight and installation labor, at no cost to buyer.”
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Red Flag Clause #5: Supplier’s Right to Substitute Materials
Risk of Unapproved Stone Substitutions
A “catch-all” clause allowing the supplier to substitute “similar” stone undermines your design vision—and can lead to mismatched color or grain.
Securing ‘Approved Equals’ and Change-Order Controls
Prohibit substitutions without written approval.
Define ‘approved equals’ by listing acceptable alternatives with documented samples.
Mandate formal change orders for any variation with cost/time impact assessments.
Callout (Sample Clause Excerpt)—Material Substitution:
“Supplier shall not substitute materials without Buyer’s prior written approval. Any ‘approved equals’ must match samples A-C dated 25/06/2025 in color and finish.”
Red Flag Clause #6: Payment Terms Favoring Supplier
Front-Loaded Payments with No Progress Locks
Terms requiring 100% deposit or milestone payments without completion checkpoints leave you financially exposed if performance falters.
Structuring Milestone-Based Releases & Retainage
Balance deposit (e.g., 30%) with progress payments tied to delivery, mock-up approval, and final acceptance.
Include retainage (5–10%) held until all warranty and punch-list items are closed.
Tie payments to submission of compliance certificates and QC reports.
Callout (Sample Clause Excerpt)—Payment Schedule:
“30% deposit on contract signing; 40% on delivery of approved slabs to site; 20% on mock-up sign-off; 10% retainage until final acceptance and warranty documentation submission.”
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Red Flag Clause #7: Limited Termination & Exit Rights
Difficulty Exiting Underperforming Agreements
A contract might allow termination only for insolvency or bankruptcy—leaving you stranded if the supplier misses key milestones.
Including Clear Termination Triggers & Remedies
Define material breach events: repeated delivery failures, QC test failure.
Allow termination after notice and cure period (e.g., 15 days).
Specify remediation options: substitute supplier or rework at original supplier’s cost.
Callout (Sample Clause Excerpt)—Termination Rights:
“Buyer may terminate after Supplier’s uncured breach of delivery deadlines or QC failures exceeding 3% of slabs delivered, upon 15 days’ written notice.”
Building a Robust Supplier Contract Checklist
Include these 8 essential protections in every natural stone supplier contract:
☑️ Precise Scope: Grades, finishes, quantities, tolerances.
☑️ Balanced Indemnity: Reciprocal coverage, liability caps.
☑️ Capped LDs: Defined liquidated damages with force majeure carve-outs.
☑️ Comprehensive Warranty: Defect coverage, duration, remedial scope.
☑️ No Unilateral Substitution: Approved equals and formal change orders.
☑️ Milestone Payments & Retainage: Progress-based scheduling and holdbacks.
☑️ Termination Triggers: Clear breach events and cure periods.
☑️ Documentation Requirements: Certifications, test reports, mock-up approvals.
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The Impact of Stone Vendors on Modern Architectural Success
Case Study 1: Atlantic City, NJ – Open-Ended Price Escalation Clause
Red Flag Clause
An open-ended escalation clause allowed the supplier to raise material costs without cap.
Impact on Project
Unexpected cost increase: Granite slab prices rose by 12% mid-project.
Budget overrun: Final stone bill was +8% over the developer’s contingency.
Schedule disruption: Negotiations over price hikes delayed final delivery by 2 weeks.
Preventive Insight
Always insist on fixed-cap escalation limits tied to a public index (e.g., Producer Price Index) to lock in maximum allowable increases.
Case Study 2: Oklahoma City, OK – One-Sided Liability Waiver
Red Flag Clause
The supplier’s standard contract included a full liability waiver for installation defects.
Impact on Project
Quality defects ignored: Mis-cut panels (15% of total) required site-drilled adjustments.
Repair costs: General contractor absorbed $18,000 in onsite labor.
Client dissatisfaction: Hotel owner reported a 20% increase in punch-list items.
Preventive Insight
Negotiate a mutual liability clause limiting waivers only for manufacturer defects, and secure a two-year workmanship guarantee.
Case Study 3: Topeka, KS – Unilateral Change-Order Rights
Red Flag Clause
The supplier reserved the right to issue unilateral change orders for “supply chain issues.”
Impact on Project
Frequent scope shifts: Supplier changed stone finish twice, citing quarry closures.
Mid-stream redesign: Architects re-approved mock-ups two additional times, adding $7,500 in design fees.
Timeline extension: Delivery slipped by 10 days due to unvetted changes.
Preventive Insight
Require that all change orders be approved in writing by both parties, and cap the number of permissible changes without penalty.
Case Study 4: Fayetteville, AR – Vague Delivery & Storage Terms
Red Flag Clause
The contract stipulated “delivery and storage as agreed,” without specifying location or duration.
Impact on Project
Site clutter: Unplanned 14-day stone storage on critical access routes triggered a 5-day crane shutdown.
Additional fees: Contractor charged $3,200 demurrage and relocation fees.
Safety risk: Piled crates encroached on fire lanes, resulting in an OSHA warning.
Preventive Insight
Define exact delivery windows, on-site storage locations, and maximum staging duration in the contract to avoid costly demurrage.
Case Study 5: Fort Wayne, IN – Inadequate Warranty & Service Window
Red Flag Clause
A limited 30-day warranty on sealants and finishes left no recourse for long-term failures.
Impact on Project
Sealant breakdown: Coastal humidity cracked sealant 6 months post-install, causing efflorescence.
Repair costs: Owner paid $12,000 for resealing and stone cleaning.
Guest complaints: Spa area closure for two days during repairs hurt occupancy by 4%.
Preventive Insight
Secure a minimum two-year warranty covering both materials and onsite finishing, with clear response-time SLAs for remedial work. Elevate your landscaping with beautiful stones from your premium natural stone suppliers.
Case Study 6: Baton Rouge, LA – Ambiguous Acceptance & Inspection Period
Red Flag Clause
The contract allowed “final acceptance upon shipment,” with no on-site inspection window.
Impact on Project
Hidden defects: Veining inconsistencies in 10% of marble panels went unnoticed until partial install.
Remediation delays: Months of back-and-forth over acceptance liability delayed replacement by 6 weeks.
Cost impact: Expedited re-fabrication and express freight cost $9,500 extra.
Preventive Insight
Define a 15-day on-site inspection and acceptance period before title transfer; defects discovered within this window must be rectified at no cost.
Conclusion & Next Steps
Contracts fraught with stone procurement contract pitfalls can derail even the best-planned stone installations. By eliminating these seven red flags—vague scopes, one-sided liabilities, uncapped LDs, sketchy warranties, substitution rights, lopsided payment terms, and narrow exit rights—you safeguard quality, timeline, and budget.
Next steps:
Review your current stone agreements against the checklist above.
Learn our supplier vetting guide for deeper due diligence strategies.
Get your stone agreement reviewed today by Citadel Stone’s contract specialists to ensure a rock-solid foundation for your next project.
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