At the beginning of a construction project, you and the other party must understand the task at hand and your terms. Not only does this help the job go smoothly, but it helps in terms of a legal standpoint.
The construction contract presents all expectations and details regarding the project and allows each party to agree in advance.
Why is the contract important?
Your contract is a legal document. Not only does it protect the other party, but it protects you too. If you do not outline the entire scope, for instance, your client could demand more work without paying for it. Likewise, you may struggle with collecting payment because of the nature of the contract. Disputes are common when it comes to weak contracts. If a problem arises, you may lose money because you did not have a stipulation regarding what should happen with that scenario.
How can you ensure an airtight contract?
When you draft the contract, there are various pieces of information to include. You will need to have all identifying information, the project description, the cost estimate, timeline, stop work clause and an act of god clause.
When it comes to construction contracts, you have to keep in mind that the order may change. You may want to include a change of order agreement with details on how to handle changes for both parties if you want to amend something. Keep in mind that contracts can be complicated, so you need to ensure no loopholes are present. When you have a tight contract, you have payment security.