Tips for negotiating a construction contract

On Behalf of | Aug 4, 2021 | Construction Contracts |

Residents and businesses in Roseland and other nearby areas of New Jersey will want to learn more about negotiating a contract with a savvy owner. These contracts may be for the construction of tenant improvements, new buildings, remodels, or expansions.

According to Construction Executive, there are some approaches that those who do construction may take. Good communication may be the first tip that you will need when it comes to negotiating a contract. Here are some others.

Understand the project requirements

Take the time to understand the use of the project and the aesthetic desired as well as dates for completion. They will also want to know how long the project will last. What are the owner’s goals regarding ease of maintenance and energy efficiency?

Estimate costs realistically

You can do your estimate based on the following:
• Owner’s performance requirements
• Itemization of the probable construction costs
• Recognition of the unknowns for allowances and contingencies.

Make your project schedule realistic

The schedule should include ample time for contingencies. Something unexpected might occur, and construction contracts should acknowledge this fact.

Highlight successful experience

Highlight the construction team. Tell the owner about your team, and that they will remain throughout the project.

Pick risk allocation battles

The person best able to prevent risk is the choice here; this might be the goal of the savvy owner. Since the limit of liability clause may be a deal-breaker, focus on the risks not caused by the construction company.

Hire an insurance advisor

Be sure your company can comply with an owner’s provided insurance requirement. An advisor in insurance can be of help. The owner and contractor should be on the same page.

Try to have a progressive dispute resolution

Mandatory negotiation will appeal to the savvy business owner. Non-binding mediation can be part of the contract with the help of an attorney.

Good communication is essential

Be willing to walk away if the communication is not good and respectful. Resolution benefits from solutions that are acceptable and effective for all.

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