5 Key Elements Every Construction Contract Should Contain

Considering the many different issues that can come up in a construction project, it’s important to have a solid foundation that starts with a construction contract to minimize your liability. For the best protection against legal trouble, your contract should have certain key components. Familiarize yourself with these elements before you get started on your project.

1) The project’s scope.

“Scope of work” is a very general, often ambiguous, term referring to a general description of the work that is expected to be performed under a particular contract. For example, a scope of work for a drywall contractor should describe the interior finishes required, designs, material needed, prices and budget, deadline, and special requirements. Make sure your contract has a clear and thorough explanation of the services to be provided, including the quality, materials, schedule, and anything else that may be relevant to your particular construction project.

2) The cost and payment terms.

Whereas the scope of the project must be detailed, the payment terms must be simple and succinct. You want it to be clear, in no uncertain terms, about the cost of the materials and construction services. You should also specify the exact schedule for payment, with amounts, along with the terms and conditions for payment.

3) The project’s time frame.

The property owner may have a tight deadline in mind, but it’s up to the contractor to make sure the time frame is feasible. Make sure the schedule of work is clear in your contract, including the notice to proceed date, construction start date, and date of completion. The contractor may also want to include a provision for delays out of their control, like permitting issues and extreme weather.

4) Protection against lien law.

In Florida, some types of construction contracts must include a visible lien notice. The notice holds you accountable for the payment of subcontractors, sub-subcontractors, or material suppliers if your contractor should fail to pay them. Essentially, it allows those parties to place a lien on your property in order to cover any unpaid services. In these cases, you should ask your attorney how you can protect yourself from lien law in your contract.

5) Dispute resolution clauses.

Whether your construction project is big or small, it’s possible for a conflict to arise between you and another party. Your contract should have provisions in case of a dispute. You may also have a clause that terminates the contract if someone breaches its terms. You certainly want the prevailing party to earn attorney’s fees and costs in the event of a dispute.

Any errors or flaws in your construction contract could spell trouble for you or your business. Make sure you team up with an experienced lawyer, like the detail-minded business attorneys at Phillips & Muir, to ensure you have an airtight contract. Contact our experienced attorneys today to get started.

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Written by Phillips & Muir

Phillips & Muir

The attorneys of Gersten & Muir, P.A. are passionate advocates for businesses throughout Miami-Dade County. We provide numerous business legal services to help make your company grow and flourish. We are knowledgeable and dedicated to finding solutions that fit your company’s needs.