3 key provisions to include in a construction contract

On Behalf of | Mar 25, 2022 | Real Estate |

Let’s face it, a construction project is a big deal. To ensure efficient execution of the project, it is important that both parties work out terms of reference. This is known as the construction contract.

A carefully-written construction contract can protect both parties’ rights while clearly outlining their responsibilities. Here are some of the crucial provisions every construction contract must come with.

Scope of the work

Chances are you will be working with a client that you have just met recently. However, this does not imply that you will have to do everything they want. The construction contract must clearly spell out the specific tasks you are being hired to perform. A clear scope of work will go a long way in preventing any confusion and misunderstanding down the road.

Project cost and payment terms

Every construction project has a price tag. And most often, this tends to be one of the most sensitive aspects of the construction project. It is important to clearly specify the cost of the project as well as the payment schedules. How much will the down payment be? After what milestones will the installments be made? And, what will be the payment mode?

Still on money matters, it is important that the contract explain what will happen when deadlines are missed. Will any penalties apply if either party fails to meet their end of the deal?

Dispute resolution

Disputes can never be ruled out in construction projects. As such, it is important that the construction contract outline how conflicts will be resolved should they come up. This clause should also specify the methods the parties will use to resolve disputes.

Whether it is a residential or commercial project, construction is a huge undertaking with significant cost implications. Find out how a well-written contract can help you protect your rights and interests while undertaking a construction project.