![]() Contractors will be incurring additional costs for labor and use of equipment.Īn owner can protect against delays in construction by including a liquidated damages clause in the construction contract. Owners will be unhappy because they cannot use the property for the intended purpose when they expected. When there are mistakes or delays, both parties are affected. If you’re an owner, what do you do if your contractor suddenly stops working on your home? Or demands excessive payment for materials and labor that you did not originally agree to? If you are a contractor, what do you do when an owner refuses to pay you after you’ve completed the work? A construction contract that details your agreement in writing will protect the rights of both parties.Ī successful construction project requires clearly defined agreement about all expectations. The consequences of not using a construction contract can be severe. All contract terms must comply with applicable laws. The construction contract also specifies the payment terms of the contract. ![]() The construction contract allows each party to detail the exact work to be performed and the responsibilities of each party during the course of the project. If you’re a contractor, the construction contract will act as your guide to handling any unexpected issues before construction is complete. If you have just decided to build your dream home, a construction contract will protect your interests in case of unreasonable construction delays and material shortages or your contractor surprises you with unexpected high costs. A construction agreement protects both parties. Other NamesĪ construction contract may also be called:Ī construction contract is necessary if you are building, renovating, or altering a building or structure. A payment schedule should include the estimated total cost of the project, instructions on how and when payments should be sent, and whether or not a deposit is required. A construction schedule is an timeline that includes milestones for completion of the construction process, projected dates, and an estimated completion date. ![]() For example, a residential contract will contain different information from a commercial construction contract.Īll construction contracts should detail the project scope, construction schedule, and payment schedule. Depending on the client, a construction contract will contain different information. A construction contract could be used for a home or business. A construction contract is a legal document that is used to describe the services and costs associated with a construction project.
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