Important Clauses in Construction Contracts

If you have a construction project, whether it's commercial or residential, large or small, you want to make sure you have a good contract you can rely on. That helps your business remain successful, and can protect you against financial loss and legal problems that could otherwise appear.

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The contract you use needs to be secure, and also needs to make the details clear for everyone. With a construction contract template, it's easier to feel confident. Here's what to consider.

Table of Contents

There's no reason you should have to spend time worrying about the construction contract template you're using, and the details you need to fill in, when you have the right information to address the important aspects of the contract. In this article, we'll cover:

  • Important Contract Clauses
  • Best Practices for Construction Contracts
  • Tips for a Secure Construction Contract
  • Advice on Construction Contracts
  • Key Considerations
  • Related Sources

Construction contracts require a few specific clauses, in order to be the safest and most effective for everyone involved. You want to make sure you're covering your business, no matter the size and scope of the construction project you're taking on. Among the biggest clauses to include are:

  1. Scope of Work — This clarifies exactly what kind of work you'll be doing, where, and when, in order to avoid any misunderstandings.
  2. Payment Terms — Not just how much you'll get paid, but when, how often, and in what way, all matter.
  3. Indemnify and Hold Harmless — You want to protect yourself from lawsuits and other issues that could arise, and a "hold harmless" clause is a good way to do that.
  4. Project Duration — How long the project will take matters, and you want to be sure you have enough time to complete it well.

By ensuring that these clauses are in your construction contract template, and you've filled in any details surrounding them, you can feel more comfortable with the completeness of what the contract offers. Then the homeowner or business owner who's contracting with you for the construction project can sign the completed contract, and the work can get started.

Construction Contract Best Practices

When using a construction contract template, you get the opportunity to have all the legal language and requirements already included for you. That's an excellent way to have the security you need in that contract. You also want to make sure you're filling in all the details of your specific project, such as dollar amounts and dates. In other words:

  • Make sure that the construction contract is fully complete before it goes out for signature.
  • Don't change any terms you've agreed to with the person needing your services.
  • Keep the boilerplate legal language, and highlight anything you've changed.

Anyone who's contracting for your services should be pretty clear on what to expect from your contract, but it's still a good idea to have plenty of transparency throughout the entire transaction.

Tips for Providing a Secure Construction Contract

You want to make sure your construction contract is sent and signed securely. Among the ways to do that is to handle the signing electronically. You can use Nitro Sign for signing all your important contracts and documents. That makes it fast and easy to complete the contract, and everything can be done online. You can also set a time limit for signing, to make sure you can get started on the work at a speed that fits your schedule.

Advice on Using a Quality Construction Contract

One of the most important things to consider when you're using a construction contract, is that they're often fairly standard. You'll have some typical language that's included in all of them, which is why a construction contract template works so well. Then all you need to do is fill in the details of the specific project, and get signatures, to make the contract complete.

Key Considerations in a Construction Contract

Some of the biggest considerations for a construction contract are:

  • Wording that helps you avoid legal issues.
  • Clarity for everyone involved in the project.
  • A timeline or deadline for completing the work.
  • A sense of security for all parties included.

With a construction contract, you can keep your business moving forward and also have a sense of security and safety. The individual who contracted with you will also have more peace of mind, making it easier for you to work better together.

Related Sources of Information

Ready to learn more about construction contracts? Here are some great resources to check out.

Construction Clauses to Review
Detailed Information on Critical Clauses
What is a Construction Contract?

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