5 Basic Construction Contract Elements For Every Project

Basic construction contracts are essential to conducting a construction business. As the owner of a construction company, you need appropriate contracts for each project. If you fail to obtain a proper contract, your company’s risks increase. Construction businesses that do not include necessary elements in their contracts find themselves in legal disputes. To refrain from spending finances on court-related costs, you need to include the correct components in each project contract. With the right features in your contracts, you will also enable proper property development and grow your business. In this post, you will discover the basic construction contract elements for every project.

Specific Materials

Include specific materials in every basic construction contract. This feature falls under the “scope of work” section of each contract. To ensure that your team provides a top-of-the-line service for customers, inquire about the particular materials they desire their buildings to be made out of. Some clients may prefer materials that assist environmental protection. In which case, you will have to obtain very specific materials. Furthermore, ask if they have a specific brand of materials that they wish you to use during the construction process. By having this information in writing, you reduce your chances of being sued due to improper material usage. As long as you follow the specifications made in this element of the contract, you will be safe from legal disputes due to materials.

Focus Area

Upon writing a basic construction contract for a project, add a focus area element. This element can be placed within the “list location” section of a contract. While the site address is essential, the focus area of the building is crucial to completing a job well. If a homeowner hires you to complete a project for them, you need to know where their biggest concern lies. If they want you to add a bathroom to a bedroom, you need clear instructions on which bedroom they want a bathroom attached to. This is especially crucial for real estate purposes. If a client is working with a Manhattan real estate agent who suggested a renovation in a specific area of a home, it is crucial that you follow their request. Include this element in your contract to refrain from creating a problematic situation for your team.

Authoritative Figures

As with any project in any industry, you need a basic construction contract section for authority. If a problem occurs during a project, you need to know who you are supposed to go to for a decision. To ensure that you ask the right person, request that every customer provides authoritative figures in their contract. Ask for a first in command and a second in command. Then, in the event that the main authoritative figure is unavailable, you have someone else to ask. As a result, project deadlines will be met and you will eliminate confusion during the construction process.

Provision For Delays

You must also prepare for delays by covering a provision for delays in every basic construction contract. Include this element in the “project time frame” section of a contract. First, write out the customer’s deadline and your schedule for meeting that deadline. Underneath those elements, write out a provision for delays. Explain that this provision comes into play when an uncontrollable factor enables a delay in a project. Such factors can include poor weather and a lack of permits. By adding this element ot your basic contract, you guarantee that uncontrollable delays will not break the contracts you sign.

Payment Due Date

Finally, construction business owners must always incorporate a payment due date into each basic construction contract. While you do not want to break any promises to your customers, you also need to ensure that they will not break theirs with you. Rather than risking receiving late or unfulfilled payments, determine an appropriate due date in every contract. More so, include specific stages within each project where payments will be due. Then, you require customers to pay you in a timely manner. This element of a basic construction contract is crucial to obtaining your earned finances.

Properly built basic construction contracts are necessary for each project you and your team work on. Inquire about the specific materials desired by each customer and include them in the contract. Add a focus area in the “list location” section of every contract. Have each customer write out a minimum of two authoritative figures. Incorporate a provision for delays caused by uncontrollable factors like bad weather. Additionally, include payment due dates throughout projects. Now, you know the major basic construction contract elements for every project.