Step-by-Step Construction Contract

Contract Signer Information

• A construction contract defines the terms of the project since these points often differ from one party to another. An attorney should be consulted to ensure that the contract is complete, accurate, fair, and enforceable, as well as brought in to act as a witness at the contract signing. The contract's date and the names of all parties are provided first in a construction contract. List the address, phone, fax, and e-mail for each party. Include contact procedures for each party to allow for easy communication if problems arise. Once the parties are listed, proceed to the formulation of the main parts of the construction project: location information, financial information, project expectations, and dispute resolution procedures.

Financial Declaration

• Provide a description of the property with the street address, name of the subdivision or building community, and information about the Homeowners' Association. Once the location of the project is established, indicate the financial aspects of the construction project. In this section, list the agreed-upon payment amount and any available financing terms. Include the payment terms for the contractor by clearly defining the schedule for construction draws and the procedure for the contractor to follow when submitting draw requests. Financing options often require insurance, so list the insurance requirements of the project. After ther financial information is laid out, the construction contract should focus on the terms governing the construction project.

Project Location Summary

• Specify the date the project should begin and a definition of what is expected. Following the start date, list the anticipated deadline for completion, and include a definition of what constitutes completion. Include a section that lays out the conditions under which delays will and won't be excused, and define the penalties and fines for failure to abide by the contract dates. Once the dates of construction are defined, include a section within the contract that details project expectations.

Project Expectations

• Expectations for the project include plans, drawings, sketches, and blueprints. Include this information and add information concerning substitution policies, change order procedures and policies, and any exclusions of the construction contract. List the access terms each party has to the construction site, and include each party's rights to inspect the project and inspection procedures. After listing each party's information, the project's location, financial information, work specifications, and access rights, include a section for dispute resolution and attach state and local documents as required by law.

Dispute Resolution and Contract Signing

• Dispute resolution procedures are important within a construction contract. Include an arbitration clause, settlement terms, and formal notification procedures. To avoid disputes arising from warranty issues, clearly list the warranty and service policies for the construction project. Attach documents required by state and local laws to the contract and the construction contract is complete. Have all parties and the witness sign and date each page of the contract.