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Why is it important to structure your contract well?

On Behalf of | Jan 5, 2023 | Construction Contracts

A contract exists as a way to make sure every party is on the same page in a construction project. It lays all of the important terms out from the start and exists as a reference point throughout the project.

How does this help in a legal context? Why is it important to build a strong contract from the start?

Understanding contracts at a base level

Freshbooks discusses the important parts to know about construction contracts. First, understand why the contract itself is important.

A contract exists as a legal document that protects all involved parties. Without outlining the full scope of the project in question, people might end up taking on more work than they bargained for. It may even prove difficult to collect payment in accordance with the contract if it is not structured well.

Weak contracts also often lead to disputes between parties. Having a contract with many stipulations and clauses regarding different scenarios can save a lot of time and money, and avoid a lot of friction.

What does a good draft need?

When drafting the contract, it is important to include all crucial information from the start. This includes things like an estimated project cost, an estimated timeline, identifying information of the involved parties, a description of the project and stop work and act of God clauses.

Changes may happen throughout the project as well, so it is important to strike a balance between flexibility and rigidity. Doing this allows for a strong contract that will not end up breaking if one thing goes wrong in the middle of the project.