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Issues That Should Be Covered In Every Construction Contract

When negotiating a construction contract, whether you’re a contractor, developer or owner, there are a few issues that you should always discuss in order to avoid problems. Covering these common construction issues in the contract will better protect everyone at stake and help mitigate any problems that may occur during a construction project. Below are the most common issues that can arise during a construction project and should be detailed in the contract.

Construction Contract 101

1. Be sure the entire scope of your project is covered in your contract. If there are any inconsistencies between the contract and the drawings and specifications they should be discussed and fixed immediately.

2. If there are any warranties on the finished products they should be spelled out in the contract. Warranties begin after the work is finished, but it goes without saying that the work should meet all necessary standards and be built to last.

3. If there are any subcontractors working on the project,  be sure to include them in the contract. Include their scope of work. They should be held to the same standards as the general contractor.

4. If any changes are made by the contractor that weren’t originally included in the contract, they need to be documented and approved by the owner. The same goes for any changes asked for by the owner or developer.

5. The contractors should be covered by an Owner Controlled Insurance Program or a Contractor Controlled Insurance Program and it should be specified in the contract.

6. Your contract should include a disagreement resolution plan for any problems that arise. Unfortunately, it is common for disputes to happen during construction projects. Even if you do have everything clearly spelled out in your contract, problems still occur. It will save you time and stress to have a plan in place for a disagreement if it does happen.

Photo courtesy of U.S. Army Corps of Engineers Savannah District by Flickr .