Essential elements of a solid construction contract

| Dec 12, 2019

As a construction contractor, you know that every project is unique. For this reason, every contract you enter into with a developer or property owner will have its own unique elements.

Even so, every contract needs to contain certain elements that help ensure you protect your rights as the project progresses. After all, if a dispute arises with the other party, your contract will provide guidance for its resolution.

What should you make sure to include?

In the construction industry, a contract often includes much more than just a single document signed by all parties. The contract itself represents the basics and the heart of the agreement, but you may need to include other documents, such as those below, as well in order to complete the understanding between the parties:

  • A detailed schedule of the construction process lets everyone know when you will reach certain milestones. This document may require changes as the project proceeds.
  • A document referred to as the general conditions outlines the responsibilities and rights of each party. A dispute resolution process is ordinarily included in it.
  • A document referred to as the special conditions provides a place to outline specifics regarding certain portions of the project.
  • The scope of work document delineates what work will be done, who will handle each phase of the work, what materials you will use and how you will do the work. The change order procedures are also included in this document.
  • A specifications document includes all the requirements and technical data for the project. The parties will handle any changes to the information in this document through the change order process described in the scope of work.
  • The cost estimate breaks down the items in the project and their costs. Some contracts will also include a bill of quantities that breaks down the costs for labor, materials and parts. 
  • The property owner will more than likely want to see a list of your insurance coverage for the project. This document helps give everyone the peace of mind that you can cover any potential losses associated with a particular project.

Depending on the project, you may need to include other documents. You may find there is a fine line between giving the developer or property owner what he or she needs and protecting your rights. In order to know what the above documents should contain, along with any other information you need to include, you would be wise to work with a Texas attorney with extensive experience in construction law.