Inspectors are human and have different ideas and can interpret the code very differently. Inspectors sometimes take a dislike to a particular contractor or homeowner and will find things that "need" to be fixed. Sometimes inspectors really like a certain contractor and will flag nothing! A few inspectors are just mean. The majority are fair. I think this is what your contractor is saying, that he shouldn't be responsible for any costs to make changes due to an inspector's unusual interpretation of the code.

You have to wonder what kind of relationship he has with the local inspectors?

I hope you vetted him really well and spoke to, and hopefully visited, some of his other recent projects.

This appears to be another recent example of poor wording in a contract for it's intent. It is standard practice for any licensed contractor to be responsible for their trade meeting code, and you should insist the contract should say as much. Think about it, if the inspector is calling for something beyond code that is going to substantially affect the project cost or timeline, then the inspector should be challenged. If for some reason the G.C. doesn't want to play the game, then the owner should be brought in to understand the situation, and you make decisions from there. This would pertain to items that are already in the scope of the project as covered in the Construction Documents and specs.

What it seems this clause is trying to cover is if the inspector goes beyond the scope listed in the Construction Documents, then that could be additional work not accounted for, so justifiable for a Change Order.

As an example, say one side of a wall is gutted, and they replace old cloth sheathed wire for the kitchen. But there are a couple outlets for the bedroom on the other side of the wall that are now exposed from the kitchen side, and the inspector makes the electrician update those too. That would be an extra as you weren't doing anything in the bedroom and the G.C never included it in their bid it.

@chispa A few years ago, a coworker and I were doing similar upgrades to our home (master bedrooms). Coworker lives on the other side of town.

The inspectors for electrical and structural would breeze through. I mean, the structural guy actually looked at stuff, but the electrical guy was in and out in 2 minutes. Meanwhile, my coworker across town had the most nitpicky inspectors ever. I felt bad. But it really goes to your point that some inspectors are human beings and will treat some homeowners differently. We never gave our inspectors any cause to think we were doing anything shady (and neither did my coworker) but I suppose if we were evasive in some way maybe the electrical inspector would take a closer look?

That clause, or some variation of it, is put in place for a few reasons; one is that until you open the walls and start the work, you have no idea what is behind those walls (rotten wood, framing previously done that did not meet code and now needs to be brought up to code which could the affect plumbing/electrical/ducting etc or existing pipes are rotten or not properly installed; just to name a few).

There are also some instances that they will be bidding to remodel a kitchen, however once walls are open the inspector could see a pipe for a bathroom behind that same wall that needs to be brought up to code, just as a simple example.

While you are correct that the contractor and any subs should be giving you prices to build your home and make sure it meets code requirements, it is simply impossible to know what they may encounter behind walls and under floor.

A perfect example is an electrician discovering a "flying junction box" that has been illegaly covered with drywall. Your electric may have worked perfectly with it, but he can't leave it. It was impossible for him to forsee and it's only fair that you pay to make it right.

That's pretty standard. The key word there is "unforeseen." If your contractor just doesn't follow code and the inspector catches it--that's on the GC to cover, and this clause wouldn't apply. (For instance, in our recent final inspection of a bathroom, our GC had installed GFCI outlets that weren't tamper-resistant, and our code requires that they be--so he just replaced them all on his dime the next day.) But sometimes other things pop up, especially in older homes, and there's no way to know until the walls are open. That's what they're covering themselves for (and reasonably so).