4 Important Elements of a Construction Contract
With the help of a Brandon construction attorney, understanding your construction contracts can be a much simpler process. Your attorney has a solid understanding of the four major elements that make up a construction contract, and can counsel you during the drafting of your contract.
1. Scope Of Work
A scope of work (statement of work) agreement can help to clearly define what will be expected out of the contract. A scope of work is a formal document that describes:
- Work activities
- Quality requirements
- Government terms and conditions
- Objective/Purpose statement
2. Change Order Provisions
In construction, projects often begin with plans and specifications from the owner, and agreement from the contractor to build to them for a stated price. However, during the course of a project, the plans and specifications may become inconsistent. The owner may want to change things, add or remove certain items, or the conditions may be different than what was agreed upon. The project can end up being completely different than what the contractor agreed to in the beginning. The contract documents will usually address these kinds of problems through Change Order provisions. Change Order provisions identify procedures for requesting and issuing Change Orders, timing, notifications, and dealing with disagreements between the contractor and the owner.
An Indemnity clause allows you to seek reimbursement for money you are forced to pay to a third party as a result of an injury that is caused by the party from whom you seek the reimbursement. For example, if one of your subcontractors leaves some equipment laying around, and a visitor trips over it and hurts themselves, they can sue you because it happened on your property, even though it was a result of the subcontractor. If you have an indemnification clause in your contract between you and the subcontractor, you could seek to have the subcontractor reimburse you for what you had to pay to the injured party. Indemnity clauses are often the most overlooked, so enlisting the assistance of your Brandon construction lawyer can help to make sure you have an effective indemnity clause your construction contracts.
4. Payment Provisions
Payment provisions are one of the most important parts of a construction contract. These provisions are typically known as “pay-when-paid” and “pay-if-paid” provisions. A “pay-when-paid” clause it when the contractor’s obligation to pay the subcontractor is triggered upon receipt of payment from the owner. In a “pay-if-paid” clause, the Contractor’s receipt of payment from the owner is a condition precedent to contractor’s obligation to make payment to the subcontractor. This payment provision can be more concerning. The subcontractor could never get paid for their work if the owner never pays the general contractor.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.