Key elements of a construction contract

| Apr 9, 2021 | Uncategorized |

When someone hires a contractor to build a home or business — or to engage in a renovation — it is very important for both people to be on the same page about even the smallest details. If a homeowner believes that the contractor is doing one thing, while the contractor believes they have been hired to do something even slightly different, it can lead to disputes. 

This doesn’t mean that either side was necessarily wrong. It just means that communication was lacking. One way to prevent these kinds of problems is to ensure that the construction contract outlines the exact terms of the job. 

What to include in a construction contract

Every contract is unique. Yours will have to reflect the specific job being done. To get started, though, here are a few key things that most contracts must contain in order for everything to go smoothly:

  • The timeframe for the project, including when it will start and when it is estimated to be finished
  • The cost of the project, calculated based on the known costs at the time
  • How and when payments should be made (which could include an up-front payment to start and full payment at the end, for instance)
  • Who is responsible for buying the materials (which is usually the company and not the customer)
  • How disputes should be resolved if they arise.

Just having a process in place can help significantly.

Now, some of these terms need to be flexible. Delays happen, for instance, so a strict deadline may not make sense. But, should any dispute arise, both sides need to know what legal options they have. When you have a problem with a construction contract, it’s always smart to get some experienced guidance.