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Include these points in a construction contract

Bidding on a construction project is sometimes thought of as the most difficult part of the project, but for a contractor who hasn’t handled many or who need to shore up their construction contract, coming up with suitable terms might be even more challenging. 

The contract that you have with the client is one of the best ways that you can protect yourself and your business. By including basic information about the project and the expectations, you can eliminate many of the litigious risks that contractors face. Here are some tips:

  • At a minimum, you should include the name of the project and a description of it. The more detailed this information, the better protection you will have. Try to write out everything you’re agreeing to complete during the course of the project. Include the materials that you’ll provide as part of the contract, as well as what extras for which the client is responsible.
  • Include the dates of the project. This should include a start date, as well as the projected completion date. You need to pad the completion date a bit just so you don’t have to worry if you have to take days off due to inclement weather or similar factors. Including a clause about alerting the client to changes to the completion date when the project can’t be completed as expected is also beneficial.
  • Unless the client pays for the project upfront, you need to include the payment schedule and terms. This may include a deposit with the balance due upon completion, but it might also include a tiered payment schedule for larger projects. Make sure to put in an interest rate for clients who don’t pay on time.
  • You should also include information about any warranty you offer, as well as what exclusions and limitations apply. Put your professional information, such as licenses, insurance, or bond information in the contract.

Before you present your contract to a client, you can have your attorney review it for any potential issues. Once you have this done, you may be able to use it as a template for future projects.