Construction is all about Contracts

The contract is the single most important part of a construction project. It spells out in detail all the possible scenarios that may be encountered on a project.

The contract defines the responsibilities for each participant and the rights and obligations associated with the parties.

Construction contracts are best reviewed and analyzed by experienced construction attorneys. Primarily because there are certain terms and conditions that are typical, but unique to construction. With that understanding a construction lawyer can spot problems much faster, or be sure to include clauses to preserve rights or limit risk.

It comes as no surprise that when there is a problem, everybody refers to the contract to see how to handle it. While everybody wants a fair or concise contract, this does not always happen.

By definition, a contract can be as simple as a verbal agreement, or as complicated as several volumes of documents. They all perform the same function, which is a mutual agreement to perform or provide something for some sort of compensation (consideration, in legal terms). The devil is in the details. And, the better a contractor understands contract terms and conditions, the better the contractor will be at managing his or her risk.

There are different types of contracts for different types of projects. Specifically, public works projects that have to conform to strict laws, while private contracts can be much more flexible. but may not be conducive to fairness. In private contracts, it is often seen that the terms and conditions are biased toward one party and not the other. There are contracts that typically are written for owner to general, or general to sub.

Some contracts are written to strongly favor the creator, and may have what are known as "killer clauses", which are terms and conditions that put an unfair amount of liability on one of the parties. Click here to find out more about killer clauses.

As much as we would like for a contract to be the "rulebook" for a construction project, sometimes things don't go as planned. Some remedies for contractors such as mechanics' liens are available, as are other types of liens for getting paid. Expect a court battle to enforce these remedies though.

As for owners, if there are delays, then liquidated or actual damages clauses help protect you. Holding retention until the contractor has finished up and performed as promised is a typical way for the owner protect themselves.

What a good construction attorney can do is work with the client when the contracts are drafted, then negotiated, and finally analyzed if there are disputes.


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