What are the typical elements of a construction contract?
The first provision in a construction contract is typically about the scope of work and performance of duties. This will outline exactly what the contractor expects to complete. The next provision will secure the parties’ performance of their ends of the contract. There will also be a payment provision describing how much and when the contractor will be paid. Next, a good contract will have provisions for what happens when there are delays in the project. Finally, contractors usually include an indemnification clause in the contract.
What are common problems with construction contracts?
The most common problem with construction contracts is that they are overly vague. Most construction contracts do not include provisions and procedures for delays, which leads to issues when the delays occur. Additionally, contracts are often too vague in the provisions for payment, which leads to problems when a party does not think they are being compensated according to the timeline.
What should I know before signing a construction contract?
Prior to signing the contract, ensure that the terms are clear in regard to expectations for the project, payment schedule, and schedule for project completion. It is important to have provisions for delays and issues that may arise during the construction project. Before signing the contract, confirm that the contractor has general liability insurance and workers’ compensation insurance for any employees who are injured while working.
How do I protect myself in a construction contract?
The first and most important way to protect yourself in a construction project is to have a well-drafted and clear contract. Next, make sure that you have documentation of your contractor’s licenses and insurance. Ensure that the contract complies with all state laws in case there is an issue that leads to litigation. Consulting with an attorney can help to ensure that your contract is thorough and compliant with all laws.