A well-structured contract ensures a successful and mutually beneficial partnership between the parties involved in a construction project.
To safeguard the interests of both the contractor and the client, it is important to include several key elements in the contract.
1. Scope of work
Clearly define the scope of work in the contract. This section should outline in detail expectations for the contractor. Specify the project’s location, size and all relevant technical specifications. Be comprehensive and avoid ambiguity to prevent disputes later on.
2. Timeline and milestones
Establish a well-defined construction schedule with specific start and completion dates. Include important project milestones to track progress. This section should also address any potential delays and the process for requesting and granting extensions.
3. Payment terms
Clearly outline the payment terms in the contract. Specify the contract price, payment schedule and any allowances or contingencies. Include details about how to handle change orders and when payment for such changes will be due.
4. Quality standards and inspections
Define the quality standards that the construction must meet. Specify the materials and construction methods to use. Outline the process for inspections and approvals at various stages of the project.
5. Dispute resolution
Include a section that outlines the process for resolving disputes between the parties. This may involve mediation or arbitration. Clearly define the steps to take before pursuing legal action.
Working in an industry expected to grow 5.2% over the next four years requires significant effort and attention to detail. Successfully completing projects starts with having a solid contract.