It is essential to ensure everyone is on the same page before embarking on a construction project. It will reduce the likelihood of things going wrong and provide direction if they do.
One of the crucial elements of the entire process is a solid construction contract, but not everyone gets it right. Mistakes when drafting the contract can lead to legal issues and delays which can cause significant losses to the parties involved. Below are some common mistakes people make when entering into a construction contract.
1. Inadequate scope of work
A poorly defined scope of work is one of the most common issues in construction disputes. The scope of work outlines the specific tasks and deliverables the contractor will be responsible for completing. If these are not detailed enough, it can lead to misunderstandings between the parties involved, resulting in delays and increased costs.
Have a detailed description of the scope of work, including the materials and equipment needed, the expected timelines and payment schedules.
2. Ignoring unexpected events
It is equally necessary to anticipate unforeseen circumstances that could prevent you from delivering your contractual obligations. Include clauses that will insulate you from liability should events beyond your control affect your performance of the contract.
3. Failure to address dispute resolution
Construction projects are complex, and disputes may arise despite the best intentions of all parties involved. Therefore, it is essential to include a dispute resolution process in the construction contract to avoid costly and time-consuming legal battles.
The dispute resolution process should identify the steps that will be taken to resolve disputes, including mediation, arbitration or litigation. It should also identify the timeframe for resolving disputes and the party responsible for paying the associated costs.
In conclusion, a well-drafted construction contract is essential for any construction project’s success. Taking the proper steps to ensure that before you are shovel-ready will significantly minimize the risk of disputes, saving time and money in the long run.