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The 7 Sins of Construction Contracts Part 2

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Contracts are undoubtedly the lifeblood of the construction industry, but we can’t ignore the fact that they present one of the most glaring vulnerabilities for contractors; after all, whatever is signed must be obliged. When you neglect to review your contracts prior to signing, it can lead to insurmountable obstacles for your business. Contract-related disputes can be costly and time-consuming, and regardless of how “unfair” the terms and conditions are, your signature is binding, which means there’s little that can be done after the fact.

Fortunately, an attorney practicing Colorado Springs construction law can review contracts on your behalf to help you avoid signing risky contracts that could ultimately undermine your business and the high-quality work you perform. As we discussed in part one of this two-part series, an attorney can review construction contracts in Colorado Springs to protect your company’s profits, reputation, and ability to work. Contract-related issues are the leading cause of disputes in the construction industry — don’t let your company be the victim — partner with our Colorado Springs construction law firm to avoid the seven sins of construction contracts.

4. Vague Material Terms

Even if the services you provide are top-notch, your hard work can be undone by failing to utilize the proper building materials. If your contract doesn’t stipulate the types of materials to be used on various aspects of a project, you must certify that the material terms are at your discretion or revise the contract to explicitly state what should be used. For example, a contractor who builds a dozen apartment buildings for an owner doesn’t want to find themselves embroiled in a dispute because they used the wrong type of asphalt shingle for the roof. This can be avoided when you have an attorney review contracts in Colorado Springs.

5. Missing Dispute Resolution Clause

Disputes are extremely common in the construction industry, but that doesn’t mean every conflict needs to be hashed out in a court of law. This may be the default method, but other significantly more cost-effective methods exist, too. Mediation and arbitration can be valuable processes for de-escalating a dispute, but you may not be able to use them unless your contract stipulates otherwise. There should be a clause addressing how disputes will be handled, if it turns out the owner is only interested in resolving disputes through litigation, an attorney from our Colorado Springs construction law firm can represent you.

6. No Mention of Attorney Fees

As we mentioned above, disputes are common in the construction industry, which means that at some point you’ll more than likely find yourself fighting for your rights. Disputes can range in value from less than $10,000 to over $1 million, and the associated attorney fees will scale depending on the size and complexity of your case. When you win in court, you shouldn’t have to squander your awarded funds on legal fees. We can revise your contracts to allocate attorney fees to the losing party.

7. Temporary Terms

When contract negotiations take longer than anticipated, you can still get to work without fully agreeing on the terms and conditions. However, it must be stated clearly in the “interim contract.” This type of contract can include a clause noting that it’s not enforceable while laying the groundwork for a mutually agreeable contract on the horizon. This is a complex contract-related consideration that is best handled by an attorney practicing Colorado Springs construction law.

If you would like to speak with an attorney from our Colorado Springs construction law firm, 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.