Construction Contracting for the Owner – Essential Terms of construction contracts

I wanted to address key terms for any contruction contract.  Although some of these may seem mind numbingly obvious, I have seen contracts over the years that failed to address very critical points.

1. Scope of Work – What are you trying to get done?  For more detail go here.

2. Contract Price – What is the price and how do we determine that? It depends on the type of contract.  Does the price include permitting, bonding or additional insurance?

3. Start Date and End Date – When do you want the work to start? When should it be completed?

4. Insurance – How much and who has to carry it?

5. Indeminfication – Who has to hold who harmless?  

6. Dispute Resolution – Are you agreeing to arbitration or litigation in the case of a dispute?  Which disputes are subject to these provisions? What jurisdiction will these disputes be resolved in? Does the prevailing party get their legal fees back? Where do legal notices go?

7. Record keeping by the contractor – Especially important in Unit Price and Time and Materials contracts.

8. Warranties – How long do they run? Who provides them? Do they cover materials, installation or both?

9.  Access – How will the project be accessed? Will units be occupied and how is that addressed?

10. Identifying the Owner’s Representative – Who will be dealing with the contractor on a daily basis and what is the scope of their authority?

This is not meant to be an exhaustive list as each project has their own individual concerns.  However, the list should give an owner an idea of how complex even the most simple contract can be.