When you are a contractor negotiating your next large project, you want to ensure you and your client agree on some basics: what work you will be completing, what the timeline is for the project and how much compensation your company will receive when the project is complete. These are essential elements for any construction contracts.
Aside from including these essentials, you can ensure you have a strong construction contract by following these seven tips:
- Use clear, concise, easy-to-understand language in the contract. Both parties should understand the contract language and contract details. Making the contract language more complicated does not help anyone.
- Research California statutes and regulations to ensure your contract complies with those.
- Agree to make any change orders in writing. You want a record of any additional work or costs that are added to the project after both parties sign the initial contract.
- Identify what will happen if the project experiences delays because of unseen weather conditions, material shortages or labor problems. Will any unforeseen delays affect the cost? Who will cover that? You should address those potential problems in the contract.
- Specify what work your company will not perform under this agreement, such as dealing with asbestos or lead paint.
- Detail how parties can resolve a contract dispute and terminate the contract if needed. You can specify that you and the other party will seek mediation or arbitration to solve your dispute and give information on how to terminate the contract if needed.
- Consult with an attorney to ensure your construction contract is enforceable and properly protects your business.
By taking these simple steps while preparing construction contracts, you are more likely to avoid a dispute, which can add to project costs and force delays. You can run your business more smoothly and ensure you are not taking any unnecessary risks that might harm your business.