Gone are the days when approval for a building project began with just a handshake.
Today a well-worded, clearly written construction contract that contains key clauses is essential to begin projects on the right foot and avoid disagreements and possible legal entanglements down the road.
Avoiding misinterpretations
If the wording of your construction contract is vague in any way, you could face disputes with property owners or subcontractors that could ultimately lead to a court date. Words like “exclusive” and “only” are important to use. All parties to the contract should agree on the methods and materials needed for the project and the timeframe for completion.
Including key clauses
The contract controls almost everything about a construction project. Key clauses you should consider adding include:
Scope of Work Change Orders
Quality Standards Match Existing
Warranties Liquidated Damages
Insurance Punch List and Substantial Completion
Allowances Dispute Resolution
Changed Conditions Contract Termination
Time is of the Essence
Using phrases such as “all work shall be performed in a workmanlike manner” and “according to manufacturer’s written instructions” lend strength and clarity to a contract.
Managing additional documents
A construction project may require the drafting of additional documents. Be sure that nothing in them contradicts anything that appears in the original contract, which is already agreed to by all parties.
Moving forward
Good working relationships develop when expectations are set forth clearly. A construction contract should contain significant detail and careful wording so that neither property owner, contractor nor anyone else involved can take advantage of the others.
