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Creating an effective construction contract

On Behalf of | Jun 16, 2022 | Construction Law |

Whether you run a large construction firm or you are a general contractor, it is imperative to make sure that you carefully go over the details of a construction contract before you sign your name. Moreover, make sure that the agreement covers all crucial areas and the information is correct.

Effective contracts help prevent confusion and costly disputes, while poorly-drafted contracts can cause the parties involved to end up in court. When litigation over a construction contract arises, the case can affect contractors and construction companies in multiple ways, from their reputation and financial well-being to their ability to secure future projects.

What should your construction contract include?

It is important to note that every construction project has unique demands and circumstances, as well as the parties involved. Therefore, take an individualized approach to the agreement. According to the Contractors State License Board, effective construction contracts include a thorough description of the work (including equipment and necessary materials), the financial aspects of the project and the anticipated completion date.

What else do effective construction contracts include?

In California, some contracts must include certain disclosures, such as projects involving swimming pools and home improvement. All construction contracts need to include a mechanics’ lien warning and some contracts have to contain a right to cancel notice.

In the event that a dispute over a construction contract surfaces, make sure you review the details of the disagreement and your options. If you cannot resolve the dispute outside of court, carefully prepare for litigation and develop a comprehensive understanding of how to safeguard your interests.