What Every Building Contract Should Include
Ten Items to Include in Every Construction Contract
1) Time of Commencement and Completion.
- Specify a realistic completion date, plus or minus 45 days, giving you an additional month and a half to fulfill the contract.
2) Reference to unavailable delays.
- To document delays caused by client changes, state clearly not only the cost, but also the time consequences of the changes on the order.
3) Draw schedule.
- Specifically state that if a milestone method is used, 100 percent completion of that milestone isn't necessary for payment, particularly if work from other draws has been done, and specify rules for withholding moneys.
4) Allowance schedules.
- To avoid disputes over allowance totals, include an itemized list of all expenses to be charged to each allowance.
5) Change-order provisions.
- Don't wait until the end of the job to deal with change orders. Change order forms with signatures of both the contractor and the consumer should become addenda to the original contract.
6) Termination.
- Allow the owner to fire the contractor for any reason. In doing so, however, the owner must compensate the contractor for all time, energy, and materials expended up to that point.
7) Conflict resolution.
- Include a clause that outlines the rules of arbitration, and the parties who will participate in the process.
8) Insurance.
- Outline who obtains the insurance policies, how much coverage is required, and who is responsible for the deductibles ( include a copy of the contractor's summary sheet page of liability insurance and a copy of worker's compensation certificate).
9) Access to the site.
- Stipulate when consumers can visit property and job site per insurance and OSHA regulations.
10) Clean up and hauling of debris.
- Verify who will clean up the job site and the location of where debris is to be hauled. Request a copy of hauling license if applicable.
1) Time of Commencement and Completion.
- Specify a realistic completion date, plus or minus 45 days, giving you an additional month and a half to fulfill the contract.
2) Reference to unavailable delays.
- To document delays caused by client changes, state clearly not only the cost, but also the time consequences of the changes on the order.
3) Draw schedule.
- Specifically state that if a milestone method is used, 100 percent completion of that milestone isn't necessary for payment, particularly if work from other draws has been done, and specify rules for withholding moneys.
4) Allowance schedules.
- To avoid disputes over allowance totals, include an itemized list of all expenses to be charged to each allowance.
5) Change-order provisions.
- Don't wait until the end of the job to deal with change orders. Change order forms with signatures of both the contractor and the consumer should become addenda to the original contract.
6) Termination.
- Allow the owner to fire the contractor for any reason. In doing so, however, the owner must compensate the contractor for all time, energy, and materials expended up to that point.
7) Conflict resolution.
- Include a clause that outlines the rules of arbitration, and the parties who will participate in the process.
8) Insurance.
- Outline who obtains the insurance policies, how much coverage is required, and who is responsible for the deductibles ( include a copy of the contractor's summary sheet page of liability insurance and a copy of worker's compensation certificate).
9) Access to the site.
- Stipulate when consumers can visit property and job site per insurance and OSHA regulations.
10) Clean up and hauling of debris.
- Verify who will clean up the job site and the location of where debris is to be hauled. Request a copy of hauling license if applicable.