What Should Be in Every Construction Agreement

Two businessmen on table with contract

Six things should be addressed in every construction agreement.

November 4, 2019
Patrick Barthet - Construction Executive

A detailed and coherent construction agreement in place on every job minimizes confusion, makes clear everyone’s respective responsibilities and reduces disputes. There are six things that should be addressed in every construction agreement.

DEFINE THE SCOPE

Define what the scope of work is that will be provided. Will it be only materials; will it be materials and labor; or will it be just labor? Be very clear and specific in how the scope of work is spelled out. Many contracts state that the contractor is responsible for all work that’s shown on the plans and specifications, as well as that which is reasonably inferable. While subjective—even if not actually on the plans or specifications, someone may believe that something should be part of the contractor’s work. This could expand what has to be done beyond what was understood or priced.

LIST ALL THE EXCLUSIONS

Do the parties each have the same understanding as to what is covered in the contract? How often are contractors faced with customers thinking something was included as part of the work? The contractor may have believed that task, or that material, or that specially fabricated item was excluded. But was it? Did the contractor articulate what was and was not in the scope and price? Specifically listing what is excluded can obviate this problem. Articulate what is not in the price or scope and reduce the chance of one party believing that something is to be done when it isn't.

Reprinted courtesy of Patrick Barthet, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Mr. Barthet may be contacted at pbarthet@barthet.com



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