Critical Contract Clauses Part 2
As Jacksonville construction lawyers, we know the importance of drafting construction contracts with much thought and care. This is why we’ve created this two-part article series to keep you informed of critical clauses you should address in your contracts. In Part 1 of this two-part series, we discussed three clauses: the scope of work, quality standards, and warranties. In this second part we’ll go over insurance coverage, change conditions and hidden conditions, and change orders.
Construction work comes with its share of risk. As a business, it’s vital you carry construction insurance to protect you from risk. A lack of insurance can cost your construction company significantly. Always check state laws. Consult with an insurance agencies for the following coverage:
- General liability insurance: protection against lawsuits and financial liabilities as a result of accidents on a construction site.
- Workers’ compensation insurance: required by law and provides coverage for injured workers’ medical bills and lost wages.
- Builder’s Risk Insurance: covers physical damage to your building as a result of damage from weather, theft, and fire. It covers materials and equipment as well.
Changed and Hidden Conditions
Hidden conditions aren’t obvious. Changed conditions are different from what was specified in the original plans and specifications. Both hidden and changed conditions can cause conflict and cost you. Eliminate or minimize potential problems by adding unambiguous language to your contracts. Specify how hidden conditions will be handled once discovered so appropriate change orders can be executed.
At the beginning of your project, plans, specifications, and pricing will be established. Although you’ll want to make every effort to minimize changes during your project, things may change for one reason or another. There may be inconsistencies in plans, conditions may be different, and items may be changed. A change order clause can remedy these issues. This clause addresses details about how change orders can be requested and the fees associated with changes.
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.