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Important Clauses to Add to Your Next Contract

In construction, every project you work on requires a contract. These written agreements determine what work you do, how much you are paid, and your legal protection if something goes wrong. Developing contracts is, arguably, the most important part of your work. In this brief article, we’ll discuss the clauses you should make sure to include in your next contract. To guard yourself against potential risks and liabilities and avoid entering a construction dispute, partner with an experienced Nashville contractor lawyer from Cotney Construction Law. 

Related: Essential Contract Clauses to Prevent and Resolve Construction Disputes

Outline for Work

There should always be a clause to outline the work that you will do for the project. This includes the scope of the project in detail, the price, and the time constraints. Many contract disputes happen over these three areas, and many inexperienced contractors don’t realize that they must outline them specifically and thoroughly in the contract. 

Change Order Process

Even if you fully outline the work, price, and time constraints, change orders can interfere with what you have established unless you add a clause that specifies how to handle change orders. Many contracts create conditional changes to the clause that outlines the work when a change order is accepted. That way, the other parameters of the contract are adjusted and you can avoid problems.

Related: Drafting A Change Order Provision 

Indemnification

Indemnification is a controversial topic in construction contracts. Essentially, it lets one party use the contract to waive responsibility for a part of the project. This could place you in the middle of a major problem should something go wrong.

If you wish to avoid this problem, it’s crucial to include a clause that outlines indemnification for the project. More importantly, you should have this clause outline what is not indemnified so that you have it explicitly stated in writing. This could save you in the event that a problem happens and the other party tries to blame you for it.


Related: Does Your Contract Need An Indemnity Clause?

Termination

You always want to have a way to end the contract if it is not turning out the way that you expected. A termination clause usually includes a process for ending the contract, which revolves around notifying the contractor and giving them the right amount of time to fix it. If you need to terminate the contract, be sure to follow the procedure that you outlined. This will protect you from future problems.

Damages for Delays

Construction projects are notorious for having strict deadlines and problems meeting them. When there is a delay in the project caused by someone else, you may run into problems completing the work on time. If your contract has penalties for going over your time constraints, you’ll lose money because of the delay. 

To prevent this type of problem, you should include a clause that allows you to collect damages for delays. This way, you can collect the costs of your expenses during the time that you cannot work. It’s a way of preventing you from bearing the costs and potential contract disputes because of a delay that you are not responsible for. 

How you set up your contract will largely determine the problems that you’ll face when things go wrong. Protect yourself and your business by focusing on effective contract management. If you have questions about business contracts, contact a Nashville contractor lawyer from Cotney Construction Law.

If you would like to speak with a Nashville contractor lawyer, please contact us today.

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.