Construction Contract Necessities

As a construction company, the nature of your work puts you in a position of serious liability. There will always be a lot of risks and potential for things to go wrong in just about any job you take.

Thus, the importance of utilizing detailed contracts in all of your business dealings cannot be overstated.

First and foremost is your contract with the homeowner or person you are building a property for. The details of your contracts with the owner will vary from job to job based on the circumstances surrounding the work you are doing as well as negotiations with the owner. However, there are certain aspects that you need to be certain to include in your contracts in order to protect yourself.

You need to thoroughly and explicitly define the scope of your planned work to help avoid misunderstandings and set realistic expectations. You should ensure that you and the owner are on the same page with regard to the timeline of the project, and also have contingencies in place for delays and that define under what conditions the contract can be terminated by either you or the owner.

Payment is also a vital aspect of your construction contract with the owner. There are numerous different ways you can structure the payment for your job depending on the nature and timeline of the work, but either way you need to have a clearly defined payment plan in place in your contracts. Avoid ambiguity at all costs and try to set specific dates for payment if possible.

Concrete contracts are just as essential when it comes to hiring subcontractors as well. It is vital to thoroughly detail the rights, responsibilities, and expectations of each and every subcontractor you use. Your contracts should ensure that each person participating in your job knows exactly what they need to do and within what timeframe, If you leave ambiguity with regard to subcontractor obligations, you leave the door open for potential disputes between subcontractors that could derail your project.

As with your contract with the owner, you will need to clearly define how the subcontractors will be paid for their work and the circumstances under which you can terminate the contract. You may also need to define how the subcontractor’s expenses will be paid (materials, transportation, etc), and prohibit them from undercutting you by working directly for the owner themselves.

Construction contracts are an absolute necessity, no matter how small the job. You need to have a lawyer help you craft contracts that will protect your company’s interests with both the owner and any subcontractors you use. Please contact the Law Office of Ray Garcia today and let us work to protect the construction company you’ve worked so hard to build.