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The importance of a good construction contract

On Behalf of | Aug 4, 2022 | Business Law |

Contractors know how important it is to have a good construction contract. This document lays out the project’s terms and conditions and helps protect both the homeowner and the contractor. 

What should you include in your agreements?

The key components of a contract

A well-drafted construction contract should include some essential elements to protect the interests of both the contractor and the owner, such as:

  • The scope of work to be performed, including a detailed description of the materials to be used and the work to be completed
  • The start and completion dates for the project, as well as any milestones that need to be met along the way
  • A schedule of payments, including any penalties for late payments or partial payments
  • Who is responsible for obtaining the necessary permits and inspections for whatever work is to be done
  • Clauses governing changes to the scope of work and dispute resolution procedures

As a contractor, you are likely familiar with the importance of having a solid construction contract in place before beginning work on a project. Without one, you may have no legal recourse if there are disputes with the property owner. While you may have a general understanding of what should be included in a contract, drafting a legally binding document can be complex.

It is often advisable to seek legal counsel to ensure your construction contracts are legally sound. Or, if the property owner draws up the agreement, they can review your contract and make sure that it meets all legal requirements.