Why Construction Contracts Are Essential

Anytime you plan to do business with someone, you should have one thing in place: a solid contract. Contracts may seem like mindless busywork for some people, but these pieces of paper are legal documents that can help you when things go wrong.

Contracts are especially useful in the construction industry, where multiple parties are involved and there is a lot of money at stake. Contracts outline the legal responsibilities of the parties involved. They help everyone understand what they need to do and what happens when deadlines are not met. Here’s a look at how contracts are essential to your construction business.

They Provide Legal Protection

Contracts clearly outlining the rights and responsibilities of the parties involved in a construction project. This is especially helpful in terms of payment. A contract can outline the terms of payments, such as when to pay and through which methods. Just make sure the language used is clear and concise. Avoid legals to ensure there is no ambiguity or confusion.

They Help Manage Projects

Contracts can be helpful by setting out specific timelines and milestones for its completion. This gives both parties a better understanding of when certain tasks are to be completed, which can help prevent delays.

Contracts can also specify reimbursements for goods and services related to the project. This helps contractors stay within budget, which is even more important when dealing with complex projects.

Contracts should include key information that will help both parties complete the project in a timely manner. This information includes state-specific language, all the financials and economics, list of key documents, warranties, start and completion dates, and coverage that applies, such as insurance and bonds. Change order processes should also be addressed in case the client wants to make changes along the way. A force majeure clause can also be helpful in the situation of bad weather or other circumstances beyond your control.

They Help Resolve Disputes

Disputes sometimes arise in construction projects, so it’s important to ensure a contract includes a dispute resolution clause. This clause specifies how disagreements are to be resolved. Mediation, arbitration, and litigation are common methods. Make sure the clause is reasonable and protects your interests.

They Help Manage Costs

Contracts provide clear guidelines for how expenses should be allocated between the general contractor, subcontractors, vendors, and clients. This helps manage costs, as it ensures each party is paying their fair share associated with the project. It may also be a good idea to include details on handling cost overruns in your contract.

Learn More About Construction Contracts

With so much building and development happening in Florida and all over the country, general contractors are keeping busy. Construction contracts are essential to keep everyone honest and prevent legal issues.

A construction project requires teamwork. Orlando construction & development contract lawyer B.F. Godfrey from Godfrey Legal will ensure that the project is managed efficiently to attain a timely completion. Schedule a consultation today by filling out the online form or calling (407) 890-0023.

Source:

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