Many construction projects are based on a mixture of technical specifications and creative visions. They can also be very costly to complete. Because of all the included factors, these projects are usually governed by a contract.
Construction contracts work to protect both parties because the terms that each party must meet are clearly defined. While each construction contract may differ slightly, these points should always be present:
Detailed scope of the project
Every solid construction contract begins with a clear description of the work to be completed. This section should outline the project’s objectives, specific tasks, materials to be used, and any design specifications. Because projects sometimes change or evolve, the method for seeking and confirming scope changes should be included.
Timeline that includes milestones
Time is money in construction, and a well-defined schedule keeps everyone accountable. Contracts should include a realistic start date, expected completion date and any key milestones. Including benchmarks for progress helps both parties monitor performance and address issues before they become insurmountable.
Payment terms and schedule
The payment section should break down how and when the contractor will be paid, which may be in stages, tied to milestones or delivered in regular intervals. The contract should also spell out what happens if there are delays, cost overruns or change orders. This ensures all parties understand how financial matters will be handled throughout the build.
Most construction contracts include dispute resolution terms, so both parties should turn to those if there’s anything that doesn’t go according to the contract. It may be best to have someone available who can assist with taking steps to remedy the contract breach.