Preparing a Construction Contract

Construction contracts are used for the building, additions or remodeling of a home, townhouse, condo or a commercial property. Before the contract is prepared, the owner and the contractor negotiate the terms. For most contracts, the contractor submits a bid. Typically, contracts are prepared by the contractor. Unless you are experienced in making contract revisions and know the contract laws in your state, you will want to hire an attorney to help you with the negotiations and revisions of the contract to make sure that your interests are protected properly.

You should never hire a contractor to perform any work on your home without a contract. Also, make sure the contractor is licensed and that there are no complaints that have been filed against him or her. You can verify this information with your state regulator agency that is responsible for the licensing of contractors. If you don't have a written agreement between you and the contractor, it will be difficult to dispute contract breaches if they should occur.

Construction Contract Provisions

Most contracts contain the following provisions:

• The name and address of each party
• The job address
• Scope of the work to be done
• Costs of materials and labor
• Price of job
• Job start and end date
• Inspections
• Regulatory compliances
• Dispute resolution methods

All issues are negotiable between the homeowner and the contractor, so the parties can add any additional information that they deem necessary to the contract as long as they both agree on the provisions.

Consequences of Poorly Drafted Contract

If the contract does not contain certain provisions for dispute resolution and contract warranties, you could suffer substantial damages if the contractor fails to perform and breaches the contract or you discover construction defects after you purchase the home. To avoid these issues, you should consult with a legal advisor first before you sign the contract. There are certain statute of limitations on making construction contract claims against the contractor or builder that you must be aware of so that you are fully knowledgeable about the law and the contract terms.

Hire an Attorney

An attorney can help you review, negotiate and revise your construction contract to make sure you are legally protected. Construction contracts are complex, and an attorney can explain the construction laws in your state so you are aware of your rights and legal remedies. It is not recommended that you enter into a construction contract without the advice of a construction contract attorney.