Having been in these kinds of negotiations many times over the 15 years I've been in business, and having never been sued nor ever had a deal go seriously wrong, the dad's advice seems perfectly sound.

The real point here is this:

In every significant business transaction (or indeed, major life decision), you have to choose where you're going be on the risk continuum between sheer recklessness and complete security.

At some point your efforts to be prudent cross over into excessive paranoia and then a new form of risk: that all the money and time you spend to try and keep everyone safe will be wasted if the deal doesn't go ahead at all, or if it reduces the amount of time and money everyone has to actually do the work.

Sooner or later all the de-risking stops being de-risking and starts creating new forms of risk.

I'm pretty sure the dad in this story was just advising his son to avoid making that mistake.

As the story said, the son sincerely expected to be able to do the work as it was scoped, for the price on offer. If this wasn't the case, the dad's advice would have been very different.

The reality is that when a small business is providing a service to a large company, the threat of legal action isn't really much of a motivator, as the small business likely doesn't have anything they can be sued for (aside from any insurance coverage they may have), so it's just not worth the cost and hassle of taking legal action. As a supplier, your reputation, along with the satisfaction of doing good work, are much bigger motivators to deliver a good result.

So everyone really knows, in a deal like this, that the only real option is that everyone works together to get the work done well, and if it looks like it's going off track, then you re-negotiate the agreement and if it seems irredeemable, consider cutting ties.

Legal action will barely ever be a sensible option in a case like this. I'm sure this was a key part of the dad's advice.