Building contract documents can be difficult to understand.
For this reason, it is in many business owners’ and facility managers’ best interest to work with a professional who understands the details of contract law.
However, purely relying on an attorney is not a good idea.
It’s better to have a basic understanding of contract documents, as it can save you countless headaches down the road.
And, you are more like to be more satisfied with the final project if you sign a detailed, easy-to-understand contract with your contractor.
The Goal of Building Contract Documents
Building contracts serve as a roadmap for the entire construction process.
They address a variety of factors, including the budget for the project, the deadline, the terms of payment and more.
With these and other considerations outlined in advance, there is less potential for conflict — and less potential for litigation.
In this way, building contract documents can deliver much-needed protection for both contractors and clients.
Ultimately, the client wants a quality structure, and the contractor wants full and prompt payment.
A building contract ensures both parties get what they want.
What Constitutes a Quality Building Contract Document?
The best building contract documents are thorough, yet easy to understand.
Although specifics are important, the components of a contract should not be so detailed and confusing that they become meaningless for the client.
However, many contracts are too straightforward and do not address the client’s needs or make plans for potential conflicts of interest.
A good contract offers peace of mind for both the contractor and the client by ensuring fairness for all parties.
Elements of a Typical Construction Contract
Building contract documents vary considerably based on the type of project and the preferences of the client, but most have at least a few elements in common.
Ideally, contract documents will serve the needs of both contractors and clients.
The following are a few of the many considerations detailed in a standard building contract:
- Scope of the Project
Before the contractor and client can proceed with a construction project, they need to know what the client expects of the contractor and which tasks the contractor is willing to carry out.
Sometimes, the scope of the project will unexpectedly change as the work moves forward.
Ideally, the building contract should acknowledge the possibility of these changes and address how the timeline and payment will change accordingly.
- Timing of the Project
It is the contractor’s job to finish a construction process within a reasonable period, but even the best contractors can face unexpected delays beyond their control.
Ideally, a building contract will provide a basic timeframe for launch and completion, but also recognition of potential delays and how to handle them.
The contract should also outline allowable extensions.
- Payment Terms
Contractors often depend on clients for regular payments in order to compensate material vendors and subcontractors.
Thus, rather than paying a lump sum upon project completion, they establish a fee schedule, with an initial payment made before construction begins and further payments occurring as the process continues.
Construction contract documents may also include mechanic’s liens, which address the concerns of subcontractors who have a stake in the property.
Pre-Written Contracts versus Personalized Professional Contracts
Multiple options for drafting contracts are available. For straightforward projects with few complications, pre-written contracts are a viable option.
These address common concerns and leave room for tailoring to meet the needs of the client and the building contractor.
In many cases, contractors are willing to furnish contracts for their clients, who then can review and sign as they see fit.
For complicated projects with the potential for numerous conflicts, a customized contract drafted by a trusted attorney may be preferable.
Building contract documents protect clients, contractors, and subcontractors, all while ensuring completion of projects as efficiently and effectively as possible.
An attorney is not always necessary when signing a contract.
However in some situations, legal representation can prove valuable for all parties involved in the project.
Whether or not you seek an attorney’s services, it is imperative that you thoroughly review any contracts before signing.
It’s also a good idea to understand all terms of building contract documents before you proceed with your construction project.
Building contract documents are not as confusing or overwhelming as you think.
If you work with a contractor known for exceptional service, contract documents are easy.
At Peak Steel, we take client satisfaction seriously, from the signing of building contracts to project completion.
Contact us today to learn more about our services and how we can meet your steel construction needs.