4 Tips on Drafting a Construction Contract
Let’s face it. Building contracts are difficult and can be intimidating to do. We don’t even know how to start writing it off. But do we need to learn them? Definitely! You wouldn’t want a messed up house all because of a piece of paper.
But first, let’s get to know what construction contracts are.
What is a Construction Contract?
A construction contract is a written document of the agreement between the homeowner and the builder. It is where the legal rights, the scope of works, special conditions, dispute resolution, and contract price are written in detail.
This, my friends, is what can make or break your building project. Some disputes happen because of poor quality work, some happen because of payment, but a lot of disputes root from construction contracts. It’s this holy piece of paper that contains the vision of your building project.
Types of Construction Contracts
This contract concerns only residential building projects including apartment buildings. It is an agreement between the builder and the homeowner.
● Commercial Building Contracts
This contract covers only commercial building projects such as shopping malls, entertainment centers, educational institutions, and many more. The parties involved are builders and business owners.
Home building contracts and Commercial building contracts can be constructed into another type of contract. These contracts are the lump sum contract and cost-plus contract.
A lump sum contract means there’s a fixed price agreed by the contractor and the owner. This is usually applied to building projects that have more certainty with its expenses and have fewer chances of changes in plans or variations.
A cost-plus contract means the owner agrees to reimburse the building expenses of the contractor. This is usually applied to large building projects or building projects where there’s no certainty on the final amount that can be spent. However, there can also be a limit with the amount that the owner may be able to spend.
Construction Contract Dispute
Sometimes, owners and builders are only friends at the beginning of their contracts. When things start to progress and suddenly, money, time, and effort are at stake, that’s when the relationship starts to get sour.
There can be two reasons for owners and builders to result in a construction contract dispute. One is because of bad contracts and the other is variations.
When we say bad contracts, we mean to actually say badly written contracts – vague contracts. This can lead to misunderstandings or misinterpretations that can result in a legal dispute.
Variations are basically changes in the contracts. You may have agreed with the other party to build that gate out of steel. But upon realizing the expenses, you decided to go for something cheaper and decided to change it from steel to wood. If you implemented that change without even consulting the other party, then you’re definitely in trouble.
Changes in the contracts is a huge thing as it deeply affects the plan for the building project. Non-agreement with specific changes can lead to a serious legal dispute.
Tips on Drafting a Construction Contract
1. Seek legal advice first.
Always always always consult with a legal expert first. This is a document that can get you in trouble legally. Moreover, you might miss important details or pieces of information that are needed to be found in your contract. You’ll never know when a tiny detail in a written document can save your life. So better get an expert involved.
2. Note down everything that you and the other party agreed on.
It’s better to have your own record of the key points that you and the other party talked about. So that if any disagreement suddenly comes up, you may go back to your contract and your own notes to double check whether that claim was written in the contract or not.
Communication is always an important aspect of every work. Through communication, anything that’s vague or confusing to you can help you clear things out. As long as you are in constant communication with your builder/client, fewer chances of falling into a dispute are guaranteed.
4. Consider even the negative possibilities.
When we talk about possibilities, we mean to say sudden conflicts or unexpected events like accidents. Dispute resolutions and insurance must be included in your contract to make sure you’re geared up throughout the building process. If these things aren’t included, chances are, you might end up not knowing what to do if these events had really occurred and may even get you in bigger trouble. So better be prepared than not.
Who can help you draft Construction Contracts?
Getting the help of a Construction Lawyer is always a good idea. As we mentioned earlier, your building contract is also a legal document. It plays a crucial role, not just in your building project, but in the whole building and construction industry. You cannot just take drafting building contracts as a piece of cake. Especially if you dislike paperwork. So clearly, getting a building lawyer is the best option.
Construction Contract Services of a Building Lawyer
We can emphasize this tip over and over. Just because guidance is the best policy for building and construction. Getting expert advice on whether or not you’ve started the building project can save you a lot of trouble along the way. Moreover, it lessens your burden. The hassle and difficulty of building something. But if you want a successful building project, might as well hire someone who can easily lead you to that success – hire a good contractor and a good lawyer.
If you want a legally sounding and well-written contract, then building lawyers offer contract drafting services that can make your contract just that. This can even prevent your contract from sounding confusing and make it look more organized for the sake of the other party.
Getting your contract reviewed can help you identify mistakes in your contract that may escalate into a bigger conflict. Your construction lawyer can also point out details that can be removed, revised or added in your contract. This can also strengthen your building contract as it shows a clearer vision of what you want to achieve in your project.
Best Choice for Construction Contract Services
If you’re looking for a construction contract service that’s quality, transparent, and efficient, then Contracts Specialist is for you.
Contracts Specialist is a Sydney-based law firm specializing in building and construction. We handle all sorts of construction contracts including home building contracts, commercial building contracts, lump-sum contracts, and cost-plus contracts. With Contracts Specialist, you are assured that your contract will never lead you to any trouble.
Our principal lawyer, John Dela Cruz, deals with different construction matters day in and day out. He can draft and review your building contract for you and can give you the right legal advice. With his extensive knowledge and over 10 years of experience in building and construction law, you can be confident that you are in good hands.
We offer services related to Building Disputes, Construction Contracts, and Security of Payments. So if you’re in a situation, we’re just one call away. Call us now and get ready to receive expert advice.
