If you’re experienced in the construction industry, you might think you know everything a typical contract should contain. But if you’re unfortunate enough to work with an unscrupulous company or you end up completing a project with poor quality materials, you could potentially risk your entire livelihood. Of course, if you’re accused of not adhering to industry standards, you should hire a construction attorney to fight on your behalf. But with any luck, these contract must-haves will significantly reduce your risk of ever needing to contact a construction lawyer.
Your construction contract should always contain…
- Scope of work being performed: This is one of the most obvious contractual elements, but many contractors actually overlook this part. While you and your client should know exactly what’s being done, outlining it precisely will protect both of you. Explain in detail the scope of the construction project and make certain that both parties understand all of the work that’s being done. Clear expectations and explanations can often eliminate issues before they ever arise.
- Payment details: Most contractors know they can never be too careful when it comes to payment. Still, if you’ve worked with a commercial client multiple times, you might let your guard down when you shouldn’t. Don’t ever make assumptions about payment, even when a client has a great track record. Clearly outline payment conditions and a complete cost breakdown. Including this information will become second-nature after a while, but that often results in mistakes. You might even have an associate look over this with a fresh set of eyes to ensure you haven’t forgotten anything.
- Arbitration or mediation clause: No one goes into a project thinking they might have a legal disagreement. But you need to plan ahead for the worst case scenario. Arbitration and/or mediation clauses can protect both parties in case of future disputes relating to the construction. Typically, arbitration cases are solved more quickly than litigation cases; even with a qualified litigation attorney, you could spend an average of 27.2 months in court arguing your case. These trials can be costly as well, so having this clause can help you save money in case of a dispute. You should consult a lawyer prior to including this clause to ascertain which might be best for your situation.
- Jurisdiction information: Large-scale projects may require you to work in an entirely different state (or even across state borders for multiple projects). This can make things tricky if you ever have to deal with a legal dispute. Adding in a choice of law clause will make it clear from the start which jurisdiction(s) will determine your contract’s legality. States have different laws pertaining to construction, so it’s good to be clear up front about which laws will govern your situation. It can even be the deciding factor in which courts you’ll need to go to, should you ever find yourself in a dispute. While you’ll still have to find a good construction attorney to represent you, this will at least take some of the uncertainty out of the equation.
Failing to protect your business adequately will have serious consequences: you might not receive the payment you deserve or you might even need to hire a reputable construction attorney to defend your case. Having these safeguards in place might not completely eliminate the need to contact a construction law firm, but these measures will certainly reduce your risk of being involved in a bad situation.