Construction projects have multiple moving parts and significant financial investments. For contractors, a well-drafted construction contract isn’t just a mere formality. Instead, it’s a key layer of protection against a host of liabilities.
Contractors should be familiar with some of the standard things that should be included in these contracts. Some of these include:
Scope of the project
The scope of the project is one of the most important points to include in the contract. This ensures that all parties are on the same page about what’s expected, including a description of the project, materials being used and the timeline for each phase. It’s a valuable protection against scope creep, which occurs when the client tries to change critical points in the project. Include terms for how the client can request changes and how those requests will be handled so there’s a set process.
Payment schedule and terms
The contract should include the payment schedule and terms of those payments. Each milestone should be included, as well as the payment deadline for each. Spelling out terms about how progress is monitored is also important.
Dispute resolution methods
It’s highly unlikely that every contract will go from start to finish without issues. Because of this, having dispute resolution measures built into the contract is beneficial. This can include alternative dispute resolution methods, such as arbitration or mediation. Be sure that it’s spelled out completely in the contract.
It’s critical to have a solid construction contract governing every project. It may behoove you to work with someone familiar with these contracts so they can ensure yours have everything covered. If there are any legal issues, having that individual on your side may make it easier for you to protect your company.
