What’s in a contract? For construction contractors, the answer should be everything. Contracts are the backbone of Florida construction work, and it’s imperative that these contracts are fortified with careful and thorough legal consideration.
But, what terms do you really need and what do some of the common terms actually represent when you’re signing a contract? We want to make sure you have peace of mind before you sign anything.
Fixed Price – For fixed-price contracts, all work must be done for the defined price that will either be paid for all at once (lump sum) or over the course of the work.
Guaranteed Maximum Price (GMP) – Under GMP terms, there is a price limit set for the work. Any work done beyond this upper limit is paid for by the construction manager.
Time and Materials – This type of contract requires the contractor to bill the owner for labor, materials, and hours worked. This is best for jobs where the amount of time and materials required is unclear.
Unit price – Unit pricing uses a fixed price on a defined “unit” such as price per square foot. Contractors bill for each individual unit in the work.
Draw Request – Many contractors are paid out in phases over the course of the job. A draw request is made when more money from the loan is needed and a phase of the work is complete. These often result in draw request disputes.
Dispute Resolution Terms
Dispute Resolution – Dispute resolution in construction contracts ensures a proactive approach when disputes arise involving draw requests, payments, materials needed, and other issues.
Indemnification – This is applied when any damages are incurred due to actions or omissions by a contractor. The contractor is held responsible for these costs as opposed to the owner unless otherwise defined.
Forced Arbitration – Certain contracts will include language for forced arbitration which requires that the involved parties enter into legally-binding arbitration as opposed to filing a lawsuit to resolve issues that arise.
Termination – Construction contracts must define when a job is able to be legally terminated. This includes when contractors are able to walk away and when the owner or client is able to terminate the work to either hire new contractors or abandon the project.
Use Florida Construction Law to Review Your Construction ContractsThese are just a sample of the many key terms included in Florida construction contracts. It’s important to have an attorney review your contracts before committing to a job. This protects you, your employees, and the work being done. Contact Florida Construction Law Group for a thorough contract drafting or review today.