Whether you work in the construction industry or you’re a homeowner, the cost and quality of construction work performed can have a tremendous impact on your life moving forward. For those in the construction industry, positive customer experiences can build your reputation, increase your marketability and lead to more profit. For homeowners, quality work can meet their needs in a cost-effective manner in a way that improves their quality of living. For all parties involved, then, a well thought out and viable construction contract is imperative.
Yet even though the terms of these contracts should be easily understandable and make the process clear, all too often they’re riddled with mistakes that leave one or both parties susceptible to poor outcomes. That’s why in this post we want to look at some common mistakes in construction contracts. Hopefully then you’ll be able to navigate your next construction job in a way that protects your short and long-term interests.
Avoid these mistakes in your construction contract
Construction contracts are legally binding documents. Therefore, the terms contained within them can have a tremendous impact on your future, and if you don’t abide by them, then you could find yourself facing legal difficulties. With that in mind, here are some commonly made mistakes when it comes to construction contracts that you’ll want to be sure to avoid:
- Not using a written agreement: You might take pride in your word, but every agreement needs to be written down. If it’s not, then the other party might fail to live up to their end of a verbal promise, and you’ll be left in a difficult position to prove that you were wronged. So, make sure every aspect of your agreement is written into the construction contract.
- The timeframe is muddled: Contractual terms should be as clear as possible. When it comes to completion of the project, then, the timeline should be easily understood, even if the agreement contains options for an extension. If the contract isn’t clear here, then the parties may end up fighting over when the project can and should be completed, which can cause headaches and cost a significant amount of money.
- Specific terms are vague or ambiguous: If you use wording that’s open to interpretation, then you’re setting yourself up for a contract dispute. Therefore, you should consider defining key terms in clear language so that there’s no disagreement over what certain words and phrases mean.
- You forget to address dispute resolution: While some construction disputes end up in court, it’s better to agree through the contract that any disagreements will be hashed out through mediation or arbitration. These dispute resolution methodologies can be quicker and more cost-effective than litigating the issue in court. But if you forget to specify how those disputes will be resolved, then you’ll likely end up in court if an accusation of breach arises.
- The contract is created through online self-help tools: We understand that you might want to try to save time and money by using online resources to craft a construction contract, but this is incredibly risky. These tools oftentimes aren’t comprehensive and utilize boilerplate language that might not fully protect your interests. So, avoid using these resources so that you don’t wind up in court over contract issues that are otherwise avoidable.
Do you have questions about construction contract formation or breach of contract?
If so, don’t sit back and let the issue grow into something even more problematic. Instead, be proactive in protecting your interests, regardless of which side of the contract you’re on. If you’d like to learn more about how to do that, then please continue reading our blog and the rest of our website.
