Experienced Kansas City Construction Law Firm

Construction contract considerations

On Behalf of | May 17, 2024 | Contract Disputes

A construction contract is an agreement between a business and a client, vendor or another interested party that could be worth tens or hundreds of thousands of dollars, sometimes even more. Large construction projects require the execution of very thorough written agreements for the protection of everyone involved.

Some construction companies, especially new firms taking on early projects, make the mistake of using boilerplate agreements that do not address specific company concerns. Instead of simply finding a free contract online that may offer questionable protection, construction firms often benefit from intentionally negotiating a thorough, highly-customized contract.

A contract makes it clear what a client expects from the company and can also help protect the business from a breach of contract by the client. What inclusions or clauses are the most important for the protection of a construction firm accepting a new project?

Clear project terms and payment rules

The most important elements of a construction project are the requirements for the project itself. Both parties need to understand the scope of the work that the client requires and how much they intend to pay for those services. Additionally, the contract should likely include terms for paying the company for the work and materials provided. Construction firms may also want to include penalty clauses that apply if a client defaults on payment, as well as clauses clarifying when the firm might pursue a lien against the property due to payment issues.

Rules for property access

Perhaps a client is a surgeon who has an irregular schedule at a local hospital. They may need how to limit access to the property so that they can obtain adequate rest. Maybe the lot or building is in a gated community, so the owner must make prior arrangements to provide workers and those delivering materials with access to the property. Clear schedules for the project and rules for property access can benefit everyone involved.

Dispute resolution terms

Even when a construction company does everything in its power to meet a client’s expectations, some people may still take issue with the final product. It is therefore crucial for construction companies to include rules about dispute resolution. Requiring alternative dispute resolution before filing a lawsuit is in construction contracts. Both mediation and arbitration can keep disputes private and lead to an amicable resolution to a disagreement about the work.

Drafting thorough construction contracts can help make construction projects more predictable and deter frivolous litigation. Owners and executives who carefully establish proper construction contracts are less likely to end up embroiled in conflicts after the completion of work on a project.