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5 Key Clauses In A Florida Construction Contract


Construction is a primary driver in the US economy, especially in Florida and Palm Beach County where it seems like multiple new developments are kicking off every week. According to the Associated General Contractors of America (AGC), the industry comprises more than 745,000 employees with 7.6 million construction workers on staff. Construction projects total more than $1.4 trillion in the US annually, representing around 4.3 percent of the nation’s Gross Domestic Product (GDP). 

The amount at stake with these projects alone is enough to help you realize the importance of having a written construction contract, even when one is not required by Florida law. A document clarifies rights and obligations, so disputes are less likely to arise. When there is conflict, you can refer to the contract to determine options for resolution. A properly crafted agreement is critical for taking advantage of the protections, so count on a Florida construction contracts attorney for help with negotiations and drafting. There are 6 key provisions to focus on.

  1. Payment Terms: The key with this clause is how and when payments are made, since most projects will involve progress and final disbursements. The details should be clear on the dates for the work completed or the conditions for certain stages of the project. Typically, the contractor will be required to submit an application and supporting paperwork at the conclusion of the payment period or construction stage.
  1. Scheduling Clause: The parties must acknowledge and agree to the duration of time required to complete the construction project, so that expectations do not get off track. Important terms in the scheduling clause include:
  • Delays due to inclement weather;
  • Requirements for requesting a time extension; and,
  • Details on substantial completion. 
  1. Provisions on Changes: It is impractical to renegotiate the contract every time there is an alteration to the construction project, so change orders are used to document the modifications. The construction contract should be clear on what is required to process and complete a change order.
  1. Damages Clauses: If a party suffers losses due to defects, delays, or other circumstances, the construction agreement should state details for compensation. It is smart to include provisions on:
  • Liquidated damages, which is an amount that the parties agree in advance if one breaches;
  • Actual damages; and
  • Consequential damages, which are indirect losses a party sustains because of a breach. 
  1. Dispute Resolution Provisions: Including terms about how to resolve disputes is useful for avoiding court; plus, the project itself does not get derailed because of time-consuming litigation. A construction contract could allow for mediation, in which a third party attempts to smooth over the disagreement. Arbitration is another option, where a panel reviews the evidence and renders a decision. 

Trust a Florida Construction Contracts Lawyer for Drafting and Negotiations

Legal help is critical when drawing up the paperwork that will govern the parties’ relationship throughout the construction project. To learn how we can assist, please contact Linkhorst & Hockin, P.A., to set up a consultation. You can reach our offices in Jupiter, FL by calling 561-626-8880 or visiting us online.



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