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Contract Clauses
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As a contractor, you
most likely have your customers sign a contract. A contract will protect you from many claims that may come up after your work is complete. However, a contract should not just be a piece of paper filled with legal mumbo jumbo you require someone sign- but a legal form you should know and understand. Often times, you may need to update your contract- but if you are not familiar with what they are signing, you may not realize your contract is outdated. Here are some clauses that may not be listed in your current forms. Read them over and if they pertain to your business, you may want to consider redrafting your current document to include these elements. For you, and your customer’s, benefit. Dispute Resolution: You are bound to have some sort of conflict between your company and a customer. Many times, this can be settled- but what if it can’t? And, what if you have to deal with a lengthy and expensive litigation procedure? Adding a clause that calls for an alternative dispute resolution, such as a mediator or an arbitrator. This will save on time and costs. Hidden Conditions: This Old House?! Sometimes there can be surprises lurking behind walls of older homes, things that you were unaware of at time of estimate. Having a clause that prepares customers for extra materials and labor for conditions found later will help make things clear ahead of time. Matching New with Existing: When remodeling or adding additions, sometimes matching new structure up with the old does not end up totally seamless. This needs to be laid out in a clause ahead of time, so that the customer knows that an exact match-up in items like paint, trim and brick may not be able to be guaranteed. Additionally, in this clause, you could limit the amount of travel involved in searching for a match, such as stating ahead of time that you will search for the exact brick within 60 miles. And as a reminder- here are some items that should also be on your contract: • Homeowner’s name and job site address • Contractor’s name, address and phone number • Scope of your work • Acceptance of responsibility for permits and approvals you may need from the municipality you are working • Proofs of legality, including proof of necessary licensing • Materials list • Warranties provided • Protection of the customer against liens and waivers • Waiver of liability for any injuries sustained • Deposits required and payment schedules • Change-order and amendment procedures • “Cooling-off” period, or, a three-day period in which the homeowner may rescind the contract without penalty As legal eagles will agree, a good contract leaves little room for interpretation- from either side. So, nailing down more specific terms and conditions, such as those listed above, will make for a legal contract that lays out expectations in advance. Construction Estimating Software |
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