Having a strong construction contract is your company’s number one defense in maintaining the best project outcomes and limiting the possibility of legal action. The contract should outline the project and make it possible to enforce, when necessary. In this short article, one of our Chattanooga construction lawyers highlights some of the most common construction contract mistakes that you can try to avoid.
Sometimes, projects face challenges with inaccurate bidding on projects. This can happen when you anticipate that a project will cost $X amount when really the cost is higher. Without clear language in the contract, your company might be responsible for material costs, even if the bidding amount that you specified will not be enough to cover it.
Too Much Vague Language
Vague language is a common mistake in construction contracts. While it might seem advantageous to keep language vague enough not to leave any protections out, it’s a much better idea to have a clearer contract with specific language that outlines everything that you need in the contract. This type of contract is easier to enforce since all parties agreed to the specifics by signing the contract in advance.
It’s far too easy to be overambitious when it comes to setting project milestones and deadlines. What happens when it comes to meeting unrealistic deadlines is that it opens up your company to liability and breaches of contract. Instead, it’s much better to set realistic deadlines that account for some unexpected delays in the beginning so that your company can honor the terms of the contract.
Not Outlining Use of Contractors
If your construction company intends to utilize the services of third party contractors, it’s a good idea to include this in the contract. This way, the client knows who will be accessing the site under the agreement, and there will not be any surprises by who has access. For projects that have specific security requirements, contractors may also need to have security clearances from the company to access the site.
Incorrect Scope of Work
Project creep happens when more tasks are assigned or expected for the same price. This can happen in construction projects when the scope of work does not do a good job of describing what the project’s scope is. It can be difficult for construction companies to prove that the scope of work doesn’t include certain tasks if it isn’t included in the contract.
No one intends to make a mistake with a construction contract. Unfortunately, contract mistakes can happen from time to time. If you have questions about an upcoming contract or need a legal contract review, contact one of the Chattanooga construction attorneys from Cotney Construction Law.
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.