Don’t Forget These Vital Parts Of Your Construction Contracts

Construction projects are complex, with a lot of moving parts, deadlines, expenses, and factors to consider. Many of those factors may be unknown or uncertain. That’s why you want your construction contracts to be as comprehensive as possible, in an attempt for them to cover and consider all possibilities, and to avoid lawsuits down the road.

Despite this, many parties resort to using online contracts, store bought contracts, or contracts that are adopted from other projects or even separate industries. This is a mistake.

While there is no one all encompassing construction project contracts, there are certain things to consider, which should be included in all your construction contracts-things that are often overlooked in the construction world.

Scheduling – It may be obvious to include a schedule of when the project begins and when it must finish. But construction scheduling is more complex than that. For example what will happen in bad weather (especially here in Florida, with hurricanes, stoppages for thunderstorms, etc)? What about material shortages?

And if you do agree that extensions will be provided, you will also have to agree how they will be requested, and if the extension causes a financial harm or expense, which party is bearing that harm or expense?

Changes – Changes are natural in a construction project, and they do happen. When adding provisions for changes, you may want to differentiate between who bears the cost for changes based on fault. Some changes may be the fault of one party, while others may be nobody’s fault at all-who bears the cost when that happens?

Additionally, the actual process for making changes through change orders should also be detailed in your contracts.

Completion – When is the project completed? Is it when it is substantially done? Is it when it gets a certificate of occupancy? There are a number of ways to define “completed,” which can be vital for ensuring or proving that contractual deadlines are met.

Cure – Many contracts will give a party a short period of time, without penalty, to cure or fix any defects. This can avoid litigation or lawsuits, and encourage parties to make necessary, smaller adjustments or fixes, that they wouldn’t otherwise make.

Types of Damages – In construction law there are all types of damages that can be sustained. What will a party owe, in the event of a breach of the agreement? For example, actual damages may seem logical-but if you are the one who has to sue, you will then have to show and prove what you lost financially. You could include a liquidated damage provisions, which presets the amount of damages, but be aware that these provisions have restrictions on how much they can legally be.

Indirect financial loss because of a breach may be a consideration as well. A construction problem can set off a chain reaction that can have a long range of financial losses. How much will the breaching party actually be liable for in the event of a breach?

Call our Fort Lauderdale business lawyers at Sweeney Law P.A. at 954 440-3993 today for questions about your construction contracts or any disputes or problems that you may be having with them.

Sources:

investopedia.com/terms/l/liquidateddamages.asp#:~:text=Liquidated%20damages%20are%20presented%20in,be%20in%20breach%20of%20contract.

liveabout.com/construction-contract-basics-844490