The details of a construction contract are critical to the success of the project. Because of this, it is imperative to make an appointment to have your Los Angeles construction lawyer review any contracts you have to confirm they are written in a manner that is crystal clear and fair to all involved parties. You also want your attorney to protect your best interest in a project.
Your attorney has a solid understanding of the major elements that go into a construction contract and can counsel you during the drafting process. Here are a few key points of a construction contract.
Scope of Work
The scope of work should clearly define what will be expected out of the contract. In other words; a scope of work is a document that describes work activities, quality requirements, timelines, pricing and other specifics.
Although this is a critical part of any contract, many people tend to overlook the necessity for details. The more detailed you are, the less likely there will be discrepancies in the future.
Payment Provisions
Payment provisions are a very important part of a construction contract. The contract should set forth when payments are to be made. The payments should be phased in and should never be ahead of what has not been completed. That is, never pay for work that has not been performed.
Insurance and Bond
A good construction contract should have provisions for both performance bond and insurance. The contractor should be properly insured including worker’s compensation insurance.
Indemnity
Due to the litigious nature of our country, it is important to have an indemnity provision in the contract. For example, if a subcontractor leaves a piece of equipment laying around the property and a visitor trips over it and hurts themselves, they can sue you because it happened on your property. This happens even if you are not at fault. But if you have a clause in the contract, you can seek reimbursement from the subcontractor.
These types of clauses are often overlooked in construction contracts so make sure you seek the advice of your attorney.
Liquidated Damages
The purpose of this is to place a penalty on the contractor for failure to complete work in a timely manner. You can have a clause, for example, that states that the contractor needs to repay monies to the owner if work isn’t done by completion date or forfeit a certain amount of money for each day beyond the original completion date.
Attorney’s Fees
A good contract will also have a provision that states if there is a dispute, whichever party wins the case is entitled to compensation for reasonable attorney’s fees.
These are just a sample of what needs to be in a good construction contract. The more detailed the contract, the less likely there will be a misunderstanding. To ensure that the contract is designed to protect you, it is in your best interest to consult with a dedicated, knowledgeable construction attorney.