1st Stop Construction
Contract Considerations

Construction contracts are an integral part of the building and construction industry. Terms of a contract can literally make or break the success of a project. Contracts are typically between owners and a general contractor or between a general contractor and their subcontractors. Contracts outline the scope of work to be performed and the manner (time, quality, etc.) in which it should be performed. A well-designed contract leaves no question of who is responsible for every individual element of the project. Contracts also will provide a means for resolving disputes if they should arise.

Scope of Work

The central aspect of a construction contract is the defined scope of work. The scope of work can be described through either a written narrative, an exhibit of construction drawings (blueprints) that depict the scope, or a mixture of the two. The scope should be written thoroughly enough so that no element is left uncovered.

Incorporations of RFIs

Construction contracts are particularly tricky because they involve very specific and unique scopes of work and each project is different. Before finalizing a contract, one should provide an opportunity for contractors or subcontractors to clarify any questions they may have on the project through RFIs (requests for information). These RFIs are official questions that are sent to the owner/general contractor and answered accordingly. The responses should be included as clarifications to the scope of work and thus included in the construction contract. RFIs can be on specific technical questions or can be administrative ones.

Timeline and Schedule

Construction contracts should outline a specific timeline for completion of the project and a schedule of the project should progress. This is particularly important if you need to have the project completed by a certain date because of a separate contractual obligation. Additionally, if your project requires coordination between many parties, the schedule will set in stone when you expect specific elements completed. The timeline can be directly written into the contract or the schedule can be included as an exhibit.

Conditions for Acceptance

Typically most construction disputes arise from acceptance of the finished product. Often, opinions differ as to what should be considered acceptable quality of work. It is best for contracts to specifically state what attention of detail the project will be examined under before acceptance. Also, terms for punch walks and corrective work can be included in the contract to prevent disputes. It is wise to write in requirements for touch-up paint, supply of replacement parts, etc. in the contractors scope-of-work description.