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Considerations before entering into a construction contract

On Behalf of | Jan 14, 2015 | Commercial Real Estate, Construction Defects

Business owners and homeowners in Kansas may be interested in learning more about the different factors worth considering prior to entering into a construction contract. Before finalizing a contract for services, it may be advisable to evaluate the prices, time frame, payment method, material terms, payment penalties, anticipated problems, resolution of anticipated disputes, inability to agree and transaction rules for particular industries. Each of these factors could potentially derail negotiations or result in adverse consequences for the party’s long-term interests.

The terms of a construction contract should be specific and explicit. The obligations of each party to the agreement and the terms of payment should be clearly spelled out. Once the contract has been signed by both parties, it may not be changed without each parties’ approval or a court order. Most successful businesses take the opportunity to protect their own interests when establishing a new agreement with a contractor.

The person paying for the contracting services should also be aware of any additional fees beyond the agreed-upon payment. The method of payment, whether it be installments or a lump sum, should also be stated in the contrac. The contract may also establish whether or not there are any penalties for late payments. Parties who are struggling to agree on the final terms often consider entering an interim agreement while negotiations continue.

People who need more information about construction contracts might benefit from contacting legal counsel. Lawyers may be effective in examining the contract for any terms or provisions that may be detrimental to the client’s long-term interests. Legal counsel may also be able to assist clients in negotiating for more favorable terms or for a modification of existing terms.

Source: FindLaw, “Ten Things to Think About Before Signing a Construction Contract”, accessed on 1/10/2015