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Three aspects to cover in a construction contract

New Jersey is seeing an uptick in construction projects, especially with construction season right around the corner. But with this projected growth, more agreements will be necessary to assure the building are completed efficiently.

But what should contractors consider in a construction contract? There are some baseline aspects that every contractor in New Jersey should include in their contracts before starting a new project.


Every project has a specific timetable for completion. As the contractor, you develop a realistic project schedule with the building’s owner before any transactions take place. You need to allow time to complete construction, hire staff and deliver any necessary materials to the site.

It takes a significant amount of planning to craft the perfect timetable for a construction project, and an ideal schedule may not include additional time for surprise hurdles during construction. You want to establish the plan in the contract, so everyone is prepared for the project’s timeline.


A large part of a contract is compensation – how the contractor will be paid. Essentially, you can use payment in a construction contract: fixed price, unit pricing, time and material and cost plus.

Each strategy varies in advantages or disadvantages for the contractor’s payment, so heavily review each payment plan before deciding which approach is the best for a specific project. For example, use a time and material contract if the scope of the project is still unclear. It ultimately depends on your project’s specific circumstances.


Most contractors do not want to fight with a project’s coordinator. They want the project to run as smoothly as possible, without any hiccups along the way, but disputes happen. Luckily, contractors establish a protocol on how to address conflicts during the construction process and resolutions.

Contracts include possible dispute resolutions such as mediation, negotiation and arbitration. Most of these approaches rely on a neutral third party to listen and resolve the dispute promptly. It negates any further damages or delays on the project due to a conflict.

Considering these details before signing a contract ensures a more straightforward process for both the building’s owner and the contractor. Also, it allows you time to review any project before a breach of contract occurs.

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