What is Construction Agreement Drafting?
A construction agreement is a legal contract that stipulates how a property owner and a contractor will work to complete a building project. It stipulates the scope of work and other terms to prevent project challenges and disputes.
If you’re in need of a construction agreement, you should read the rest of this article. We’ll cover the essential terms to include in it for clarity, what to consider when drafting the contract, and how an experienced lawyer will help you with the construction agreement drafting process.
What are Key Terms in a Construction Agreement?
A construction agreement usually contains the following essential components to govern the working relationship between parties:
- Work scope. Detail the specific tasks required and provide a deliverables schedule to prevent delays or ambiguity.
- Payment. The total payment amount for completed work must be stated, as well as payment deadlines and retainage, should this be required.
- Penalties. There should be clarity about when penalties apply, such as for delays in completion.
- Defective work. If there is a problem with the workmanship, the agreement should specify if the contractor has to fix the work within a specific timeframe to protect the property owner’s interests.
- Change orders. Should project changes be required, the agreement must include how they can be approved by both parties.
What are Tips for Drafting a Construction Agreement?
Once you’ve established key terms in the construction agreement, there are some things to consider when drafting it.
Be Comprehensive
Provide details about the work to be completed. Include information about labor, equipment, and materials required to finish the project. By having a detailed scope of work, you’ll prevent going over budget.
Consider a Liquidated Damages Clause
This clause includes a fixed daily amount of money the contractor will have to pay the property owner if the project doesn’t meet its completion date. This serves to cover any costs from the project delay that the owner will face.
Clarify Change Orders
It’s common for construction agreements to contain change order provisions to accommodate for any adjustments made to the project. This section should include approval processes for the changes, how prices will be adjusted to accommodate them, and any documentation requirements.
Outline Risk Management
Make sure that you allocate risk should something go wrong during the construction project. Mention the parties’ insurance responsibilities and liability caps to protect their interests.
Provide a Defect Liability Period
You want to ensure a high standard of workmanship. If any defects are noticed in the work, you’ll want the contractor to fix the issues. Set a defect liability period, which is usually 12 months from the completion date, to minimize your risk of financial losses.
Should You Hire a Lawyer for Construction Agreement Drafting?
You don’t always need to hire a lawyer to draft your construction agreement, such as if the arrangement is simple and clear. However, if you’re dealing with a construction project of significant value or it’s complex, you should hire a lawyer for assistance.
A lawyer can assist you with drafting your construction agreement in various ways, such as by:
- Accurately defining the scope of work to ensure that the agreement makes it clear exactly what the work and deliverables are to be provided.
- Establishing the project price and payment schedules to prevent payment disputes in future.
- Setting fair and reasonable project timelines. This includes establishing completion dates, milestones, and time extensions, if agreed on.
- Allocating responsibilities. A lawyer will assign specific responsibilities for parties so that there’s no ambiguity over what’s required of them.
- Managing change orders. A lawyer will set a formal process to approve changes to the scope or other aspects of the arrangement.
- Dealing with compliance. By using their legal knowledge, a lawyer will ensure that the agreement terms are aligned with all regulatory requirements.
- Protecting your interests by specifying what remedies apply for delays or non-performance.
- Reviewing your construction agreement if you’ve already drafted it. This ensures you haven’t missed anything important that should be included in the contract.
Where to Hire a Lawyer to Draft a Construction Agreement
If you need to find a lawyer who’ll draft your construction agreement, you don’t have to worry about where to locate one. Instead of calling traditional law firms in your area, you can make use of online legal platforms like ContractsCounsel which make the search for a reputable and experienced lawyer easy.
ContractsCounsel is one of the largest online legal marketplaces that connects you to a curated network of lawyers, all of whom have been vetted on the platform. You’ll have access to lawyers who are reputable, professional, and experienced.
To request that a lawyer on ContractsCounsel drafts your agreement, here are the easy steps to follow online:
- Visit the ContractsCounsel marketplace.
- Select ‘One-time project’ and ‘Create or update contract.’ If you need an agreement review instead, you should choose ‘Contract review.’
- Post your project for free.
- Include some details of what you need so that you’ll connect with suitable lawyers.
- Wait for bids. Without having to search for lawyers, lawyers directly on the platform will send you bids to work on your project.
- Review lawyer data on the platform. This includes information such as the lawyers’ location, field of expertise, credentials, years of experience, and client ratings for previous projects completed on the platform.
- Select a lawyer and hire them to draft your construction agreement for a flat fee.