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Construction Contract Template

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More Information about Construction Contract Template

What is Construction Contract

A construction contract is a legal agreement between two parties on the states about the details and cost of the construction project. Construction contract covers really expensive, complicated projects, and easy renovations. There are two kinds of clients that can take benefits of construction contracts: commercial and residential. Both clients have different requirements that define what’s included in the contract.

This is formal agreement for construction, modification, or reparation of structures or buildings. A construction contract is different from a contract to accumulate, construct, or manufacture.

Construction Contract Basic Format

Here are the important elements of a construction contract can cause major vulnerabilities if ignored:

1. Name and address of both parties - Though this might seem obvious, this normally overlooked component of construction contracts is needed to make the contract legal binding.

2. Scope of work - Even though this is a component that is normally included in most construction contracts, a lot of people tend to add incomplete details.

3. Payment terms and the cost of payment - This is important in order to avoid confusion on payment.

4. Work Schedule - Create a clear notice to starting date.

How to Create a Construction Contract

Step 1: Start with the title and introduction. The title has to describe the contract’s purpose. The introduction has to simply state the basics.

Step 2: Describe the details of the work. Clarify the exact description of work you will do. You must also describe the tools, materials, and equipment you will use to do the project.

Step 3: Clarify financial details. Don’t forget to clarify how much payment the construction work is going to make throughout the process.

Step 4: Include due dates of the payment. Be specific on the date of payment installment.

Step 5: Provide the clear description of the project. The project description has to be very brief and easily understand.

Step 6: Define how any changes to the work order is going to be managed. Include terms and requirements to shield you from unexpected work and extra expenses.

Step 7: Include the coverage details. Say that you will carry overall accountability insurance and the compensation of the insurance as required by the law.

Step8: Make a signature line. Both parties have to sign the contract in order to make it legal.

More Tips about Food Menu

1: Require that the construction contract safe a payment bond.

2: Make the checks payable to the subcontractor and contractor equally.

3: Ask the general contractor to get a release of all liens before making the final payment.

4: Include retention of funds provision, basically a set-aside in order to cover possible liens.

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