Emily Clarke

5 Things You Must Include in a Construction Contract

It doesn't matter whether you're a general contractor doing repairs or a remodeler transforming homes for your clients. You need a contract. Contracts protect both contractors and customers. It lays out the terms of the agreement, sets expectations upfront and eliminates surprises.

Many professionals use software with a construction contracts generator. But what should these documents include? Every contract can have unique clauses, but here are a few basics.

Homeowner and Contractor Information

Every contract needs to have information for both the contractor and the client. You must include your business name, phone number, email address and physical address. It's also important to provide your contractor's license number.

The same basic identification information applies to the client. However, it's also wise to list the address where you'll complete your work and assert ownership. As a contractor, you should perform research to ensure the homeowner owns the property.

Description of Work

This section details the type of work you'll perform and the expected timeline. It provides peace of mind to clients that you're on the same page and eliminates any questions about what your services entail.

Cost and Payment Information

Before you send a contract, you likely provided your customer with a quote. You should use information from your estimate to list the complete project cost. This section will also detail how the homeowner plans to pay for your services. If it's through installments, list pay dates and amounts required.

If the client is getting financing, it's also a good idea to include a clause that provides information about how to terminate the contract if they fail to secure a loan. You can also have a right-to-stop clause that details what happens if the client fails to pay you.

Damages and Limitations of Liability

This section includes information about what happens if you fail to complete the project or unforeseen circumstances arise. Typically, you'll work with the client to agree to damages and have those terms here.

Inspections and Access

If you're working on-site, use a construction contracts generator to include access information. It ensures you have a legal right to be on the property. Many contractors will also have terms about a homeowner's rights to inspect the property during reasonable hours.

Author Resource:-

Emily Clarke writes about sales and business automation tools for construction companies and contractors. You can find her thoughts at software for contractors blog.