Photo by Carol Mitchell

Update: The majority of contractors are honest professionals who do a great job on time and on budget – but you’ve undoubtedly heard horror stories about shoddy or even dangerous workmanship, and severe delays in completing a project. To make sure you’re protected against any problems, it’s essentials to have a well written service contract that you are happy with before you hire your contractor. Making sure you’re covered for any work over-time and over-budget as well as knowing there is a legal process in place will save you both time and money further down the line.

If you have decided to hire a contractor or architect to provide you with their services, a good contract that you both agree to is important to have signed and in place to ensure the project successfully meets your expectations. A well written and fully detailed contract that outlines every step of the process is important; and a contract should elaborate on the requirements of both parties in order to avoid misunderstandings.

Architects and contractors who are unprepared or unwilling to commit to a written contract should not be hired, not because they may not be capable, but because they lack professionalism which is an indicator of future potential problems. A well-written and enforceable contract will have the terms and conditions and all costs clearly detailed. Most contractors and architects use a standard contract format that suits the needs of most of their clients. Areas such as cost, materials and site location are customized to meet the needs of the specific project.

Clauses such as liquidated damages clause or a bonus for early completion can be used as financial motivation for contractors to complete the work on or before the stipulated time period. Delays in construction are common, 101 Ways to Save Money When by by Dan Fritschen and can be a major source of aggravation and inconvenience for the homeowner.

Here are important clauses that should be a part of any enforceable contract, and what they mean:

  • An assignment clause prevents the contractor from transferring the project to another contractor without the homeowner’s permission.
  • The capacity/independent contractor clause establishes that the contractor is not an employee of the home owner.
  • The entire agreement clause establishes that all the terms to be considered have been included in the contract.

Other important clauses that can make a difference to the cost of the project include; legal expenses; return of property; notice; and arbitration. These clauses are essential elements of a well-written contract and can help a home owner save money in the event of a disagreement.

Other factors to be included in any contract agreement include the laws for the State that will be applicable for the agreement; validity of the agreement, which can be until the work is completed or for a fixed period of time; periodicity of payment — whether weekly, monthly, or at the end of the job.

In fact, having a signed contract can save a homeowner the effort of a court case because matters can be resolved much more quickly, often without the help of an attorney. In the unfortunate event of a court case, having a signed contract will make negotiating a fair settlement easier. With a contract that outlines the details of a project, the grievances will be easier to assess and rule on.

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