When it comes to signing any kind of contract, everyone knows that you need to read it first. It’s so important, both legally and financially! And when it comes to contracts of a more technical nature, such as a construction contract, it’s even more important to gain a thorough understanding.
A construction contract can be defined as a legal document between a contractor and the owner of a property, wherein one party is agreeing to perform labor and services and supply the necessary materials to complete a project, while the other party is agreeing to make payment for those labors and services. Many states require a contract for this type of work. All construction contracts have certain requirements that must be included before they are legal, such as:
- Start and completion dates.
- The scope of work to be completed.
- Payment terms to include total price.
- Outline of the warranty period.
- The contractor’s license information.
A property owner needs to understand the terminology used in the contract as well so that traps and penalties can be avoided. Some clauses will be beneficial to the owner of the property, while others will be beneficial to the contractor, and it’s important to know what those are. Some common traps that can result from lack of understanding your contract can be:
- Large penalty fees for cancellation of work.
- Vague details for work to be completed, such as paint color, etc.
- Giving contractor discretion as to additional work.
- The due date for the project not included.
A property owner will want to read both sides of the contract, or the second/third pages, in order to avoid missing important information. Be aware of any ambiguous language that can void the company’s warranty or insurance coverage. Owners have the right to amend a contract in any way prior to signing, including adding or excluding anything they want or rewording portions that don’t work for them. A contract can be held by the property owner overnight to give them time to look it over carefully or consult with legal representation. High pressure sales tactics should also be resisted to avoid issues further down the road. In addition, an owner should never sign an open contract, no matter how well they know or trust the contractor they are planning on working with.
If the construction project is going to be undertaken to repair storm damages, beware of “storm chasers.” These people will visit areas after a storm has come through and do property damage assessments that may or may not be correct, and will then submit insurance claims that can be fraudulent, basing them on supposed damages that don’t actually exist or are much more minimal than their assessments claim. A property owner will need to be careful of signing anything here without a second opinion from a company that they trust; a contract from a company like this will more than likely be written to their advantage, not the owner’s.
Here at Ascension General Contractors, we take pride in the quality of our work and our communication. When it comes to your property, we know you need a team of experienced professionals you can trust, whether your project entails a full remodel or repairs. Our team is here to guide you through all your residential and commercial improvements so that you can make educated decisions.