If you are engaging the services of a building contractor, a solid contract is in everyone’s best interests. A strong, comprehensive contract can help set clear expectations for all parties involved by detailing everyone’s rights and responsibilities under the terms of the contract. Crafting a contract that helps avoid unwelcome surprises and sets forth what should be done in the event of any such surprises is important. Here we will take a look at some of the things you should prioritize for inclusion in a contract with a building contractor.
Things to Include in a Contract with a Building Contractor
First, you should be aware of the fact that building contracts are rarely if ever, one-size-fits-all. Different jobs and circumstances will merit the use of different contracts. For instance, you may want a fixed-price contract that provides a set amount for a job completed. You may want a cost-plus contract that includes costs of materials in addition to the costs of labor. Detailing the cost as well as the terms regarding payment of the project cost will be a critical part of your contract with a building contractor.
The costs that each party will be responsible for paying should be set forth in the contract. A list of the completed project costs should be included as well as how you will be responsible for paying such costs. Sometimes, project costs can be payable in installments. If this is the case, you should include the list of dates upon which installment payments should be made as well as the amount that is to be paid.
The contract should also be sure to include the very basic elements such as the contractor’s name and contact information as well as their license number. Your information as the property owner should be included as well. The legal description of the property, which can be found in the deed on record with the county clerk’s office should also be included. A list of any attachments to the contract should also be included. Attachments will often include things like blueprints and other job specifications.
If there are licensing, permitting, or insurance requirements for the job, these should be detailed in the contractor. The contractor should, in fact, check with the state to see what necessary licenses or permits may be required for the job. Furthermore, the building contractor should likely be required to secure liability as well as workers’ compensation insurance with a reputable company.
An important part of this type of contract will, of course, be a detailed description of the work to be done as well as the completion date. The more detailed the description, the clearer you and the building contractor will be that you are on the same page as far as what work is to be done, how it is to be done, and when it is to be done. There should be a clause regarding Change Orders so that any changes to the original contract must be put in writing and signed by both parties. You may also want the contract to include a warranty that the contractor warrants their work is free from defects and, if there are defects, that they will be fixed in a time explicitly set forth within the contract.
While putting a contract in place can help ensure that the work you want done is done and done so properly, contracts are sometimes breached. This is why you will likely want to include a remedies clause that will come into play in the event of a contract breach. Such a provision will set forth each party’s right to pursue legal action for the breach and where such legal action must be brought.
Lastly, in the event a dispute arises, you should be sure to include a mediation clause that requires the parties to go to mediation before filing a lawsuit and an attorneys’ fees clause indicating that the prevailing party in a lawsuit will be entitled to collect their attorney’s fees from the other side.
Real Estate Attorney
Are you thinking of retaining the services of a building contractor? Consult with the team at BoyesLegal, APC. To help ensure your best interests are protected with a sound contract. Contact us today.