By Lauren White, RCS Reporter.
More often than not, contracts are signed before they are read. Construction general contractors and subcontractors are guilty of this as well. With the competitive nature of the construction industry, it’s exciting when a new job comes along. And this is when contracts get signed without thoroughly examining them. Cotney Construction Law recommends reviewing the following information before signing the dotted line.
Reviewing the Contract
Everyone wants to move quickly once a bid is won and a contract is awarded. It is very important to pause and review the contract to avoid any unfair contract clauses. This will give you time to negotiate a better agreement should you need to. Cotney Law shares, “Ignorance will not stand up in a court of law. No matter the size of the project, read the contract line by line or hire a legal attorney to review your contract before celebrating your new venture.”
A Well-Drafted Contract
Make sure the contract includes all relevant elements so contractors and subcontractors aren’t left with contract terms and obligations that are unacceptable. Cotney Law provides some contract essentials that should be reviewed, including: “provisions that are key to the contractual relationship, the scope of work, the list of contract documents like specifications and drawings, if there is a recognized authority such as an owner’s representative, and the schedule of work and delays,” among other things.
Method of Payment
Construction disputes often arise due to payment. This is yet another reason to read through a contract. Be sure to check for any fine print, especially in the payment clause, that could be hiding information and leave you without reimbursement. “The contract should address the scheduling of payments, the calculated amounts, type of payments, retainage, payment authorization, payment release, and so on so forth,” according to Cotney Law.
Disputes are inevitable, even when you believe your relationship with the other party is strong. It’s important to determine how to best manage conflict before it’s an issue. Cotney Law explains, “If you want to avoid going to court, include an arbitration clause, but remember you waive your right to go to court if you choose this method.”
Consult an experienced construction attorney like Cotney Construction Law for more information on reviewing contracts.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.