Important Parts of a Construction Contract

If you are a contractor or a frequent client of construction projects, you know that construction contracts can be daunting. They can be multiple pages long and contain a lot of confusing jargon.

While you should always read the entire contract, what should you focus on? Here are some of the most important parts of a construction contract that you should definitely not overlook.

Costs 

Costs are probably one of the important parts of a construction contract. Many people want construction work done, but they want to know if they can afford it first. Cost estimates help contractors make good decisions, identify cost savings, and keep clients informed. They are a key part of cost management, so they should be accurate. They involve calculating various elements, including material and labor costs, subcontractors, equipment, and markup.

 Materials 

Material selection should be detailed in the contract. By detailing materials and construction techniques, the contract sets clear expectations for the end result. In addition, detailed material specifications prevent substitutions of inferior materials, which helps preserve the intended quality of the project.

 Allowances 

Contractors will often give clients an allowance, which is a certain amount of money allocated for an unfinalized portion of the project or when costs and quantities are not known at the time the contract is signed. For example, allowances are often used for items like flooring, cabinetry, and door hardware. These are items that the client often selects on their own, since there are so many design options in these categories.

Design

In a construction project, plans become part of the contract. The blueprints incorporate design and many other elements, so it’s important that the contractor and client are on the same page and know what is to be expected. Commercial plans tend to be more detailed than residential ones, and this level of detail is extremely helpful for the contractor. The contract should include information about the plans, such as the architect who drafted them and the date they were drafted. Clients should review this information thoroughly, since they are the ones who will have to live with the design.

Change Orders

A construction change order is like an amendment. It is a document that modifies the original agreement for a construction project. Change orders typically involve adjustments to the project’s cost or schedule. Common reasons for a change order include design and scope changes, unforeseen issues, and material unavailability. Change orders should include a clear and detailed explanation of the change, the justification or reason behind the change, and any adjustments to the project timeline, including start and completion dates.

Contact Us Today

Construction contracts can be complex and confusing. Contractors and clients alike should understand the most important parts of a contract so they know what to expect.

The Florida construction contract lawyers from Linkhorst Law Firm can help you draft a contract that meets your clients’ needs while protecting your legal rights. To schedule a consultation, call 561-626-8880 or fill out the online form.

Source:

procore.com/library/construction-contract-documents