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A solid construction contract offers distinct protections

On Behalf of | Mar 21, 2024 | Construction Law

Contractors have unique job duties. Because of the creative nature of construction projects, it’s critical to have specific terms set forth in each individual project’s contract.

Having a solid construction contract is critical to protect both a contractor and a client. A few things should always be included in a construction contract.

Defining the scope of work and expectations

A comprehensive construction contract clearly outlines the scope of work, detailing what will be done, how it will be done and the expected outcome. This clarity protects the contractor by setting precise expectations with the client, preventing scope creep—where additional work is requested outside the initially agreed-upon scope—without appropriate adjustments to timeframes and costs. By specifying materials, quality standards and construction methods, the contract also sets a clear standard for satisfactory work completion.

Establishing payment terms

A well-drafted contract includes detailed payment terms, specifying the amount, method and timing of payments. Payment terms can also include provisions for:

  • Handling unforeseen costs or changes to the project
  • Ensuring that the contractor is compensated for all work performed
  • Addressing cost changes for additional tasks that arise due to changes requested by the client or unforeseen challenges

This can protect the contractor from delayed payments or disputes over the value of the work completed.

Including timelines and deadlines

Including specific timelines and deadlines for the project’s phases and completion protects the contractor from disputes over project duration. These clauses can also outline the procedure for dealing with delays, whether caused by the client, by unforeseen circumstances like weather or material shortages or by the contractor.

Limiting liability

A solid construction contract includes clauses that limit the contractor’s liability, specifying warranty periods and the types of damages covered. It can also include indemnification clauses, where the client agrees to protect the contractor against third-party claims related to the project. Liability limitations are crucial for protecting the contractor from unfair claims and ensuring that any liability is proportional to the level of control the contractor has over the cause of the issue.

Contractors may also need other matters covered in their contracts. Working with someone familiar with these kinds of contracts may provide a contractor with the legal assistance they need to protect their interests on each and every job.