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What do you need to cover in a construction contract

On Behalf of | Nov 13, 2020 | Contracts

When you decide to work with another contractor, company or entity on an Oregon construction project, assume that there is a high potential for issues and disputes to arise. Construction disputes are often costly and time-consuming. They may also lead to significant delays when it comes to finishing your project.

According to Construction Review Online, you may be able to lower the chances of finding yourself embroiled in a construction dispute by having all parties involved in the project sign a carefully drafted construction contract. The contents of such contracts vary from one project to the next. However, most construction contracts should cover the following areas, among others.

A description of the job and expectations

When drafting a construction contract, make sure that you take care when outlining the scope of work. Be as specific as possible when it comes to what the job of each contractor is to prevent misinterpretation or confusion.

Payment terms

Many construction disputes arise over missed or delayed payments. Use the construction contract to stipulate exactly when and how parties expect to receive payment for work performed.

Termination clause

You may want to give yourself or others a way out of the contract if someone breaches its terms. A termination clause outlines the circumstances under which the contract and business relationship might terminate by mutual consent.

Indemnity clause

Many construction contracts also contain something called an indemnity clause. In short, this type of clause seeks to shift certain financial responsibilities from one party to the other in an effort to prevent losses if certain circumstances arise.