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Construction contracts provide valuable information

On Behalf of | Sep 24, 2020 | Business Law |

Individuals who hire a contractor want to ensure that the project they’re paying for is done properly. The contractor wants to ensure that they’re being compensated appropriately. A construction contract can help keep both sides of the matter protected.

While these contracts will vary slightly from one company to the next and from one project to another, there are some basic points that are universal. Understanding what these mean can help everyone involved to be sure they’re covered.

Every contract should include a description of the project. This lets the client know what is going to be done and serves as a guide for the contractor. This should be as detailed as possible, so there’s no room for questions about the scope of the project.

The payment terms must be included in the contract. This is determined according to the agreement between the client and the contractor. Typically, contractors will require a down payment before the project starts. They may require partial payments at specific points during the project, and then the remaining balance is due upon completion. These terms must be clear, so both parties fully understand them.

The timeline for the project should also be included. There should be information about what happens if the project finishes later than usual or what circumstances might be allowable for a delay.

Another point that must be put into the contract is the resolution method. This might be limited to an alternative dispute method, such as mediation or arbitration. Both sides should pay close attention to this because there’s a chance that this term will prevent them from taking other legal action