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3 critical considerations for any construction contract

Business contracts, including construction contracts, vary widely depending on the situation at hand. That makes it difficult to provide an all-inclusive checklist for what you need to look for in a construction contract. Add in all the legal verbiage that usually comes along with such agreements, and it can be difficult to tell if all your bases are covered. This is one reason you might want a business law professional on your side when facing new contracts.

While no perfect checklist exists, there are a few items that are critical for any construction contract. First, the contract should always provide a time frame. This protects you whether you're the property owner or the construction contractor, because it creates a realistic expectation of when work will be completed. Just make sure you don't sign a document with unrealistic time frames, especially if you're the contractor.

A second consideration is price. Again, this is an important stipulation for both parties. For the contractor, including honest, transparent pricing in the contract helps alleviate collection issues and disputes about payment and provides a legal foundation for recourse if there are problems. For the property owner, price details in the contract alleviate the worry that expenses will skyrocket once the job is underway.

Finally, payment method should be included in any contract. When and how is payment expected? Does the contractor want some amount up front with total payment made once the job is complete? Is the contractor accepting payments with interest over time? Do various milestones trigger various payments? These are possible options that should be spelled out clearly in a contract. In order to make sure the contract is legal and binding, it should be reviewed by a business law attorney.

Source: FindLaw, "Ten Things to Think About Before Signing a Construction Contract," accessed July 20, 2016

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