How to Compose a Construction Contract

A construction contract is a written agreement between the property owner and the construction contractor, citing the particular terms of the project. It states the parties that will be involved in the project and their obligations, costs, and duration of the work among other requirements. While engaging a lawyer is usually the easiest option for some homeowners, you can also opt for a standard contract or DIY. 

The Basic Elements of a Construction Contract 

Since you will need construction workers from time to time, it is important to learn how to compose a construction contract. A standard construction contract should comprise the following key elements. 

  • Project owner. 
  • General Contractor – The information about the contractor should also include his or her license number.
  • Sub-contractors – Indicate whether the general contractor will need to hire additional workers for the project. 
  • Project Site – The address or location of the worksite. 
  • Description of the Work – You should precisely explain all the construction works to be done with the specific agreements for the same. 
  • Contract Pricing and Payment – Give a proper breakdown of all the construction costs and, state how payments will be made. 
  • Accompanying Documents – Attach all the documents related to the contract including building plans and blueprints. 
  • Construction Materials and Labor – State the party that will supply and pay for the construction materials and labor. 
  • Licensing and Permits – The contract should show the party that will obtain the required permits and licenses for the proposed works. 
  • Starting and Completion dates.  
  • Work Changes – State how any changes to the agreements will be handled after the commencement of the project. 
  • Project Warranties – You should also indicate the specific warranties given by the contractor for the project. 

The above elements are the most important when developing a construction contract. However, you may also want to consider adding other aspects like insurance, indemnification, inspections and force majeure. Overall, you should focus on composing a contract that mutually benefits both the project owner and contractor. 

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