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10 Construction Contract Mistakes You Should Avoid

When you’re ready to have your home or business built, it’s easy to be excited about the prospect of a new structure. But there are many details that must be worked out before construction can begin.

1. Not asking for a detailed contract

If you want to make sure that every detail of your construction project is covered, ask for a detailed contract. It should include everything from who will be doing the work, how long it will take, how much it will cost, and who pays for what. If you don’t receive this information up front or if something is unclear in the contract itself (such as who pays for labor costs), get clarification before signing anything!

2. Not getting payment schedule details in writing

  • The schedule of payments should be clear.
  • The schedule of payments should be in writing.
  • The schedule of payments should be agreed to in advance by both parties (and not just verbally).
  • The schedule of payments should be detailed, specific, and agreed upon by all parties involved.

3. Hiring a company based on the lowest price alone

It’s a common misconception that the lowest price is always the best option. A contractor who charges less for their services may not have the same level of quality as one who charges more, or vice versa. This is especially true with larger projects where there are many moving parts and details to consider, so it’s important to do your research and find out what works for you based on your needs.

4. Paying too much upfront

Make sure you’re not being charged for work that hasn’t been done yet or being asked to pay before the contractor has finished his or her part. It’s also important that your contract includes all materials needed for completion, so there aren’t any surprises when the builder asks for more money later on—and make sure it specifies if any additional funds are required for things like permits and inspections, as well.

5. Failing to get all promises in writing

You should never assume that your contractor will fulfill a promise. Make sure that you get everything in writing, even if it seems like common sense or an obvious thing to do. In fact, the more obvious it is that something needs to be in writing, the more likely it is that it’s not.

Sometimes contractors don’t want their employees working with other contractors on a job because they think they can get away with cutting corners (for example, they might not show up when they say they will). You need assurances from your contractor before signing anything!

6. Not reading the fine print

The most important document in your business is the construction contract. Make sure you read it. Remember, contracts are legal documents, not just a formality to get through the process of hiring a contractor.

You should always understand what you’re getting into before signing on the dotted line for any contract. If you don’t understand something about your construction contract, ask someone who does know, like a construction lawyer, such as Chedid Storey Legal, to help explain it to you.

7. Don’t assume that all contractors are created equal

 There’s no such thing as a ‘standard’ construction contract, and each one will have its own set of terms and conditions. Make sure you understand what kind of work is being done before you hire someone so that you can make an informed decision about whether or not they’re the right fit for your needs.

8. Forgetting about local laws

It’s important to remember that local laws are different from one city or state to the next. In some places, contractors will be required to pay a permit fee before starting a construction project. In others, you may need to hire local workers for certain phases of your job. Also, in some areas where there are many union workers, your hiring practices could be affected by these unions’ rules about who gets hired first.

9. Not including a termination provision

This is a clause that allows you to terminate the contract if the other party fails to meet their obligations. This is essential to protect your interests, but it’s not something that you should use lightly! It’s best used as a last resort when all other attempts at reaching an agreement have failed and in cases where the breach is so severe that it would be unreasonable not to terminate (for example, if they’ve stolen your money). But even then, before you pull the trigger on this clause, try one more time with your contractor or supplier: ask them for an explanation as to why they haven’t fulfilled their part of the deal.

10. Omitting performance requirements

Performance requirements are one of the key components of a contract. They’re a way to ensure that you get what you need from your contractor. In addition, performance requirements help ensure that your project stays on track and within budget.

Performance requirements should be included in all contracts regardless of size or complexity. They should also be specific and measurable, realistic, and easily understood by both parties.

To avoid these common mistakes and save yourself the trouble of dealing with them, consider hiring a construction lawyer to review your contract before you sign it. It is also worth mentioning that every construction contract should include business insurance clauses to insure the safety of your business and your employees. 

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Disclaimer: The information in this article is provided for general education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. It is not intended to be and does not constitute financial, legal, tax or any other advice specific to you the user or anyone else. TurtleVerse does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.

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