What do you need to cover in a construction contract?

On Behalf of | Nov 9, 2020 | Construction Contracts |

When you and another New Jersey contractor, homeowner or business owner agree to work together, a construction contract outlines the terms to which you agree. It also outlines everyone’s rights and responsibilities. Putting these expectations in writing increases the chances of everyone having realistic expectations. It may, too, lower the chances of a contract dispute that may jeopardize the project and cost everyone involved considerable money.

According to Construction Review Online, a solid, enforceable construction contract should outline the following provisions, among others.

The scope of work

Be as clear as possible in your contract when outlining the scope of work. Dictate that everyone involved in the project must follow building and engineering codes, project plans and other decided-upon specifications. If the scope of work excludes any specific areas, make note of this in the contract.

The payment terms and timeline

The majority of construction contract disputes arise because of disagreements about payment. Use the contract to specify the exact payment terms associated with the project. Disputes may also arise because of unplanned delays. Use your contract to dictate when the job should undergo completion.

A dispute-resolution clause

It is always wise to discuss how you plan to handle any disputes that may arise in your construction contract. You may decide that you all must undergo mediation in response to conflicts, for example. Alternatively, you may decide to settle matters through arbitration, adjudication or litigation. In construction, it is often not whether, but when, a contract dispute is going to arise. Having a solid construction contract should make things that much easier to navigate when they do.

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