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The essentials: 15 things your building contract should cover

Anyone who is involved in the construction industry will tell you one thing: contract breaches are the worst. From failed payments to laid down tools, change orders to running overtime, these breaches can jeopardise and even put an end to whole projects.

This is why you need the best building contract lawyers to cover all the bases in your original documentation. They can ensure that every minute piece of required information is entered in this imperative legal document, ensuring that the risk of breach or disagreement is greatly minimised before ground is broken.

They will be sure to put the following – and more – in your building contract:

  • The contractor’s name and their business information. This includes the contractor’s licence number, company address, phone number and email;
  • The homeowner’s name and their contact information. This includes the owner’s phone number, email address, the construction site’s address and assert that the homeowner owns the specific property;
  • The property should also be described in legal terms. There should be a property description found on a deed which can provide such information;
  • Any attachments that can benefit the contract like blueprints;
  • The cost to build: list what the overall project costs and whether the homeowner will pay outright or over several instalments. If the owner will pay in instalments it is important to list what dates by which they must pay the instalments;
  • Details regarding how the homeowner can go about cancelling the contract if they are unable to qualify for financing;
  • Describe the type of work and its completion date, as this allows the property owner to know there’s an understanding between them and the builders. This clause describes in detail what is being constructed and its exact completion date. Mention the immediacy of the project if the homeowner requests it;
  • Detail the right to stop work as this is important if the homeowner fails to pay the builder. Detail how either side can go about terminating the project;
  • Detail the right to withhold payment if the work is subpar or if certain stipulations exist;
  • Solutions for a breach of agreement as each party can sue for such a breach. List the state in which the action may take place, as well as the state where the contractors are located;
  • Requirements for proper insurance, licences and permits. Builders should be aware of their state’s licensing obligations and ensure they have the correct licensing. Worker’s compensation insurance, liability insurance and other forms are required, so check with a reputable provider what kind of insurance is required;
  • Unforeseen circumstances: provide for what happens if there is a natural disaster that halts or damages works;
  • Access and inspection: This clause should allow the owner to inspect the property at reasonable hours and for the builder to have unlimited access to the site;
  • Change orders: It often happens that a party wishes to deviate from the agreement, and so it should be covered with the formalities of the original agreement and agreed upon by both parties;
  • Warranties: Builders should warrant that their work is performed in a “workmanlike” manner, free from defects and that they will fix any defects within the agreement’s specific timeframe.

This is just the beginning of what should always be a very profound legal agreement. Given its complexity and depth, it should always be completed with the assistance of reputable lawyers who have your best interests close at heart. This is always the best way to avoid disputes and – if they do occur – have the best chance of a winning outcome.

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