A contract is, in its most basic sense, a written agreement that outlines the expectations of each party. When it comes to construction projects, these agreements can cover issues that range from relatively simple timeline expectations to more complex liability concerns.

Are there issues that are unique to construction? In short, yes. The construction industry is unique amongst the business world. As such, it is beneficial to have an understanding of some of the issues that can arise during a construction project.

What are some examples of issues in the construction industry? Three specific issues that can result in serious problems for construction firms include:

  • Incorporation by reference. This legal term essentially refers to a provision that incorporates another document into the contract. It is easy to miss this type of provision. An attorney can watch for this reference and request a copy of the document that is incorporated, review that document and explain its implications so you can make an informed decision on its inclusion.
  • Liquidated damages for delay. This provision essentially puts liability for meeting deadlines on the firm signing the contract. This can result in the signor bearing responsibility for a failure to meet the project deadline.
  • Unclear provisions. Clarity is of utmost importance in the event of a dispute that results in litigation. If courts are involved, it is important that the terms of the contract are unambiguous. Clearly structured provisions can help ensure your interests are protected and also make it more likely that the dispute could be settled outside of court through arbitration or mediation, saving both time and money.

How can my firm mitigate its risk? It is important to tailor each provision within the contract to the current project. A boilerplate agreement can lead to serious headaches and leave you unprotected in the event of a dispute. Mitigate this risk by contacting an attorney.