How To Protect Your Rights When Signing a Construction Contract
Whether you are building a new house, renovating a property, or managing a big development, signing a contract is a vital step. These agreements, which are between a project owner and a contractor, define the project’s scope, including the work involved, process, and the project’s terms and conditions. When you sign a construction contract, you put your money, property, and trust on the line. It is vital that you take proactive steps to protect yourself before signing on the dotted line. A construction contract is not just paperwork. This legally binding document determines how smoothly your project proceeds and how well you will be protected in the event of any issues.
Below are some of the key ways to protect your rights when signing a construction contract.
1. Read and Understand Every Detail Before Signing
Never rush through a construction contract. Read through every section of the agreement carefully and ensure you understand all clauses. Does the contract reflect what you and the other party have agreed upon? If something seems unclear, do not hesitate to seek clarification or request changes before signing. Once you sign the contract, you are bound by it. So you want to ensure you are bound by clear terms.
2. Clearly Define the Scope of Work
A well-drafted construction contract should outline in detail the work that will be performed, the materials to be used, and the expected quality standards. It should include details on who is responsible for permits, approvals, and inspections. The scope of work section should not be ambiguous, as that might lead to misunderstandings, confusion, or disputes.
3. State Payment Terms Clearly
Payment issues are among the most common causes of construction disputes. Disagreements concerning payment timing, amount, or justification for payments are pretty common. To protect yourself, ensure that your construction contract clearly states the amount to be paid, when payments are due, and what milestones must be achieved for payment to be made.
4. Include a Change Order Process
In almost all construction projects, unexpected issues arise that necessitate changes to the original plan. However, verbally agreeing to changes can result in misunderstandings and conflicts. That is why your contract should outline a formal change order process. This is a written procedure for approving any changes to the original agreement.
5. Include Dispute Resolution and Termination Clauses
Regardless of how carefully you plan everything, disputes can still arise. A well-drafted contract should consider this and include a dispute resolution clause explaining how conflicts will be handled when they arise, whether through litigation, negotiation, mediation, or arbitration.
Additionally, ensure the contract includes a termination clause that explains the conditions and grounds upon which either party can terminate the contract. This section should incorporate for both parties, for example, the penalties that apply if one party fails to meet their obligations.
6. Get a Professional Review
Lastly, but certainly not least, before signing a construction contract, ensure that you have a qualified construction law attorney or legal advisor review the document. A skilled professional can help identify vague provisions or hidden risks. This vital step can help prevent legal problems in the future.
Contact Us for Legal Help
For help ensuring your rights are protected when signing a construction project in Tennessee, contact our Knoxville construction law attorney at Reynolds, Atkins & Stewart, PLLC.
