Whether you are the contractor or the owner in a construction project, having a good contract in place before any work is started is absolutely essential. It will help to make sure everyone is on the same page so there is no confusion or miscommunication. It can also help to minimize the risk of litigation after the job has begun.
Unfortunately, even when a contract is signed, there are often mistakes which undermine the integrity of the document. Below are four specific mistakes to watch out for:
Oversimplifying the Contract – Many people try to keep the contract extremely simple. While there is generally no need for a 200 page document, the contract MUST include everything that each party has agreed to orally. Make sure all contracts answer the main questions about the job, which can be summed up as “who, what, when, where, how and how much.” If your contract does not answer one or more of those questions, it should be revised.
Improperly Identifying Individuals & Companies – Remember, the contract is a legal document so you should be using the legal identifiers of everyone involved. If hiring a contractor or sub-contractor, for example, make sure to use their full business name throughout the contract. In addition, make sure the person signing the document has the legal authority to sign on behalf of the company.
Using Standard Contracts without Necessary Revisions – Many contractors use generic legal contracts to help simplify the process. While this can be a very useful option, it is also important to make edits to it as needed. Make sure the final version of the contract properly reflects the actual work that is being done as well as any other details that are being agreed upon.
Failing to Read the Entire Contract – This is perhaps the biggest mistake people make when it comes to any legal document. Even if you trust the people involved, it is best to have everyone read through the contract completely to ensure there are no mistakes or misunderstandings. We highly recommend that you have a construction attorney read it as well.
By avoiding these four common mistakes you can help ensure that the job will go much more smoothly. In addition, everyone will have the written document that they can refer to in the event that there are any disputes during or after the job.
If you have any questions about construction contracts, please don’t hesitate to contact us – we look forward to assisting you!
