What is a Construction Services Agreement Drafting?
A construction services agreement is a legal contract signed by a client (such as a property owner) and a construction company. It serves to outline how the work will be completed, such as by detailing project deadlines and payment to avoid disputes.
Although you can make use of a construction services agreement template, some of these aren’t customizable, which is problematic because you want the contract to be specific to your situation.
Read the rest of this article to explore how to draft a construction services agreement, what key terms should be included in the contract, and how a lawyer can assist you with a legally-enforceable construction services agreement drafting to protect your interests.
What Should Be Included in a Construction Services Agreement?
The following key terms and components should be included in a construction services agreement.
- Work scope. This outlines what the construction project entails, down to the materials that will be used.
- Timeline. The project’s effective start date, milestones, and completion date are included so that both parties’ expectations can be aligned.
- Payment. The payment terms include information about what payments are required and when, such as if they’re triggered by reaching certain milestones.
- Changes. If there are any changes that need to be made to the project, the agreement should provide clarity on how they can be approved and executed to prevent delays.
- Termination. This outlines the conditions that can trigger early termination of the agreement, such as if there is a breach of contract by one party.
- Warranties and indemnification. This provides a guarantee from the contractor of the quality of the work and includes information about liability, such as if there are on-site damages or injuries.
What are Tips for Drafting a Construction Services Agreement?
Once you know what key terms should be included in the construction services agreement, there are other things to consider when drafting this contract. Here’s a rundown of some important elements to bear in mind.
Set Clear Expectations
Both parties will want to know that they’re on the same project track to prevent misunderstandings or delays. All tasks, deliverables, duties, and labor must be included so that parties are informed of what’s required to complete the construction project.
Provide Payment Transparency
Since payments can be one of the biggest risks for disputes, you want the agreement to include clear payment terms. If you’re making use of a non-fixed price contract, you should detail how it’s calculated.
Avoid Modification Disputes
The agreement must include how changes to the project will be handled. It should discuss what documentation is required for changes and make provision for both parties to agree to any suggested changes prior to their execution.
Include the Property Plans
It’s good practice to include the architectural plans in the construction services agreement as they lay the groundwork for the project.
Clarify Warranties
Warranty clauses in the agreement should specify how long the warranty will last and what defects will be covered. There should also be clarity about what processes will be executed to replace or repair work that’s not of the agreed-on quality standard.
What are Common Pitfalls When Drafting a Construction Services Agreement?
There are certain things you shouldn’t do when drafting a construction services agreement so that you avoid potential issues or disputes. Here are some to bear in mind.
- Relying on verbal agreements. One of the biggest mistakes is thinking you can trust a verbal agreement. Even if both parties are genuine, it’s easy for confusion or misinterpretations to occur. Get everything in writing, such as project or contract changes.
- Not considering “scope creep.” The term “scope creep” refers to when additional work is done without it having been agreed on, which can result in disputes. To prevent it, the agreement must clearly specify all tasks and deliverables. There should also be information about how revisions or repairs should be conducted and compensated.
- Assuming responsibilities are taken care of. Construction projects usually involve additional duties, such as getting all building permits and cleaning the site. These should be considered prior to drafting the agreement so duties are clearly specified.
Why Should You Hire a Lawyer for Construction Services Agreement Drafting?
Although you don’t legally require a lawyer to draft your construction services agreement, it’s advisable, especially if the project is of a high-value and carries significant risk.
A lawyer will help you in various ways, such as by:
- Providing clarity. They’ll explain all your duties, risks, and rights so that you have peace of mind.
- Allocating liability. A lawyer will address all liability limits and warranties, while explaining who’s responsibility should there be defects or delays.
- Complying with all relevant laws. There are also regulations and building codes to consider. A lawyer will align the agreement to all of these so that terms are compliant and legal issues prevented.
- Reviewing subcontractor duties. These will ensure that all processes are conducted smoothly to prevent delays.
- Protecting you against disputes. Should disagreements arise between parties, a lawyer will ensure the agreement outlines the best dispute-resolution method to use, such as arbitration or mediation.
- Preventing ambiguous clauses. They’ll draft a contract with balanced and transparent wording to protect both parties from risks.
Where to Find a Lawyer to Draft a Construction Services Agreement
If you need to find a lawyer to draft your construction services agreement, you don’t have to search far and wide. Use an online legal platform like ContractsCounsel, one of the largest online legal marketplaces where you get access to a curated network of vetted lawyers.
To request that a qualified lawyer draft your construction services agreement, all you have to do is follow these five easy steps:
1. Go to the ContractsCounsel marketplace and post your project for free.
2. Include a few details, such as the type of construction project, so that lawyers will be better informed of what you need.
3. Wait for lawyer bids. You’ll receive multiple bids from lawyers directly on the platform who can assist you.
4. Once you receive the lawyer bids, you should review the lawyers' profiles. There’s lots of info on the platform to help you choose the best lawyer, such as their location, client ratings, years of experience, and field of expertise.
5. Connect with a lawyer you think is best suited to your requirements and hire them.
