Construction Contract Must-Haves

Regardless of the size of the construction project, having a contract is essential.  It is the elements of a contract that give it its worth. The contract is a collection of documents.  From ground-break to closeout, this collection of documents should clearly describe the scope of the work to be done, the schedule for getting the work done, and the cost and the responsibilities of the parties to the agreement. This signed agreement is more than a handshake - it is a legally binding commitment that holds each party accountable for their promises and provides a pathway for resolution if those promises are not kept. 

The Agreement

The construction agreement spells out the basic terms that will govern the entire construction process as well as the agreed-upon total price.  This signed agreement will often reference other documents and addendums that all the parties are bound by when they sign the agreement.

• Lump sum: single fixed price covers all labor and materials

• Cost-plus: guarantees payment for all construction expenses plus a profit

• Time and materials: this contract pays for the labor and materials so it will adapt to what those costs add up to

General Conditions

Each project has unique aspects that require custom-fit elements for it to be completed. The special conditions portion of the contract is a tailored approach describing and defining the nitty-gritty aspects that the general conditions portion doesn’t cover. The General Conditions essentially fine-tune the contract by clarifying the project specifics required to do the project at hand. These can range from safety protocols to how the site will be managed day-to-day.

Scope of Work

The scope of work defines the work that will be performed on the project.  From contractors to subcontractors, the scope of work outlines the tasks and objectives so it is clear what is expected of the various people working on the project.

Construction Drawings

These drawings are instrumental in guiding the work on the project effectively. The drawings are essentially the construction road map, offering the essential details and dimensions needed to complete the project.

Specifications

The specifications (also known as “specs”) contain the project’s material requirements, installation methods, quality standards, timeline milestones and technical data. The specs communicate what the drawings are not able to alone. They bridge the gap between the vision of the architect and the engineers to what actually gets built.

The Schedule

The construction schedule is more than just a plan.  It is a commitment to a detailed sequence of activities and establishes critical milestones that guide the project’s progression. 

Bill of Quantities

The bill of quantities is an itemized list of the materials and services that are required to complete a project. The list forecasts the costs of the project and helps set financial expectations for the contractors and the clients.

Construction projects have a number of moving parts from the materials to be used to the people contributing to the project. The contract allows everyone to know their roles in the project, what their specific job entails, what materials will be used, and what the completion of their job looks like. Having a contract in place sets expectations by everyone involved and a roadmap to meet those expectations. It also provides direction regarding what will be done if those expectations are not met. Investing the time and money in working with an attorney to craft an individualized comprehensive contract before the construction begins can save valuable time, significant money and help avoid litigation.