Proud Neighbors In Cincinnati

Proud Neighbors In Cincinnati

Best practices for writing construction contracts

| Nov 19, 2020 | Civil Litigation |

Builders, land developers and investors rely on contracts to identify their responsibilities during a construction project in Ohio. Thorough contracts reduce the possibility of misunderstandings and provide a framework for resolving disputes. They also cover critical issues, like schedule milestones and payments. Although each construction project will have its own unique requirements, a construction contract should generally cover:

  • Scope
  • Exclusions
  • Change order process
  • Schedules
  • Dispute resolution
  • Recovery of legal fees

Scope and exclusions

The scope of the work defines what the contractor agrees to do. Clearly defining the scope could prevent costly misunderstandings about who should have done what. The exclusions section enhances the scope by eliminating confusion about what a party specifically is not going to do.

Changes and schedule

A good contract recognizes that adjustments may be needed. The change order process describes how the parties will go about altering one or more terms or deliverables. Similarly, the contract needs to outline the schedule and explain what the consequences will be for missing deadlines, such as liquidated damages.

Disputes and legal fees

When a contract explains how the parties should approach disputes, you may avoid going straight to litigation. The contract may state that people should discuss their problems and then enter mediation as the next step. If those methods fail, then arbitration or litigation may become necessary. To further protect your financial interests, a contract may specify that the winner of a dispute has the right to collect reasonable legal fees from the other party.

Plan for success and prepare for problems

Contract law and numerous other real estate and business regulations influence the development of construction contracts and the resolution of contract disputes. An attorney’s interpretation of contractual clauses could guide your decision-making process.