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Before Signing a Construction Contract

10 Critical Things to Consider Before Signing a Construction Contract

by | Jul 14, 2019

A construction contract is between you and your client. Because you are creating an agreement, you want to make sure you protect your business – as well as the customer. The contract should spell out the project scope, address all customer expectations, your duties and expectations as the service provider, and any responsibilities on behalf of the client.

While drafting a contract may be boring, it is imperative you do so properly. Not doing so can open your business up to potential lawsuits, fines, and even closures by the state or city.

10 Things to Include in Your Construction Contract

These ten things should never be left out of a construction contract and include:

1. Time – Your agreement should have an applicable timeframe. If you are delivering the finished product within a specific timeframe, you must list the expected date of completion or delivery. You can also draft the contract to state that the date is subject to change or can be renegotiated in case vendors or subcontractors slow your project.

2. Price – You should have your pricing clearly listed in the contract. Whether you have additional fees, hourly rates or you have agreed on a price, it must be in the contract in order to enforce it. If you have a detailed estimate that you have given the client initially as part of a quote or proposal, then be sure to include these details in the contract. Don’t forget to double check for any discrepancies and/or inconsistencies.

3. Accepted Payment Methods – You and your client should also discuss preferred payment methods. If you will be dealing with a financial institution, then you should this information listed in your contract–including a withdrawal schedule. You will also want to ensure any funds not covered by a construction loan are addressed in order to receive payments as scheduled.

4. Penalties for Non Payment – If a customer does not pay as they should, then your contract must clearly state the penalty for non-payment or even late payments. Make sure your penalties are reasonable; otherwise, the courts may not honor them if you ever have to take a non-paying client to court.

5. Materials – If there are specific materials the client is paying for – such as a quartz counter top – make sure those are listed in the contract to ensure there is no confusion. This ensures the client knows what they are paying for and what they will receive. If the client changes their material decisions later on, then the contract should be amended or an addendum should be created to reflect any changes.

Also Read : 5 Things to Consider When You Kickstart Your New Business

6. Transactional Rules – Make sure all transactional rules that apply to your construction business are included in the contract so that you can remain in compliance.

7. Inability to Agree – If for any reason you and the client are unable to agree on the final terms, you need to ensure you have a clause about an inability to agree and how that will be handled.

8. Anticipated Disputes – While you do not plan on a dispute, you will want to have information regarding disputes in your contract so that you and the client know how to handle them.

9. Attorney’s Fees – You will also want to discuss how attorneys’ fees will be handled if a dispute arises – such as if the client initiates the dispute, whether or not they will cover your attorney’s fees.

10. Subcontractors – If your business uses outside resources or suppliers, such as subcontractors to complete the job, make sure you have specific clauses regarding those suppliers and how issues with them will be handled. Because they are not employees of your business, you want to make sure your business is not liable for damage or injuries caused by a subcontractor.

If you are drafting a construction contract, contact Miami contract drafting attorney at Campbell Law Group to discuss your contract needs. We can help you create a solid contract for your business and latest construction project. Call 305-460-0145 now to get started or visit our office in Coral Gables, Florida.

Also Read : Understand What Makes a Contract Enforceable

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