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What provisions should your construction contracts contain?

On Behalf of | Oct 27, 2021 | Construction Law | 0 comments

As a contractor, your contracts with the customers for whom you work represent a critical aspect of your business. They form the basis of the work you will do, for whom and the amount you will receive as payment for your work.

The Florida Bar cautions that your contracts must contain the names of the contracting parties, as well your license number, energy information and insulation ratings for the various components you will use. They should also contain a legal description of the property where you will perform the work.

Cost, allowances and payments

Each of your contracts should likewise state the project’s scope, total price and the allowances or credits, if any, granted to the homeowner for his or her selection of such things as the following:

  • Roofing material
  • Fixtures
  • Appliances
  • Floor coverings
  • Decorating
  • Landscaping

It should also state the dates or stages of completion when the homeowner will pay you and the amounts thereof.

Insurance coverage

The amount of your insurance coverage during construction is another good provision to include in your contracts, such as for the following:

  • Commercial general liability
  • Workers’ compensation
  • Builder’s risk

Liquidated damages

Finally, you may wish to include a liquidated damages provision in your contracts. These are the damage amounts you and the homeowner agree to accept in the event that one of you breaches the contract. For instance, a breach on your part could consist of failing to complete the project on time. Conversely, a breach on the part of the homeowner could consist of failing to make timely payments.

All in all, making sure that you have a well-written contract for each of your construction projects can save you time, money and stress in the event of a future dispute.