What Are the Most Requested Terms in Construction Services Agreements?
ContractsCounsel is a platform where lawyers and clients can connect to draft business agreements. Our real data from the platform shows that clients who need construction services agreements have specific concerns. They want certain clauses to be included in the document, such as risk protections and indemnity clauses, payment terms, work clauses, and damage provisions. Having these ensures transparency and accountability so your project doesn’t get delayed. Read on to learn about the most important clauses to include in your construction services agreement, and how a lawyer can help you draft them.
Note: All data from the ContractsCounsel is anonymized and taken from thousands of real projects that have been completed on the platform.
1. Risk Protections and Indemnity Clauses
Clients want to know they’re protected should something go wrong. They need to be sure that there are liability, warranty, and indemnity clauses to appropriately assign risk between contractor and client.
Takeaway: Clauses should be clear and transparent so that all parties understand and accept the terms, preventing loss and other damages.
2. Custom Payment Terms and Holdbacks
Payment plans and worries are a common concern for clients. They want to be sure that deposits are linked to project milestones. They might also wish to have holdback clauses stating that projects need to be completed before payment is released.
Takeaway: By stating payment schedules clearly in the agreement, this maintains the project quality and reduces financial risks or setbacks.
3. Redo and Defective Work Clauses
If the contractor’s work doesn’t meet expectations, clients want to know they can have repairs or revisions completed without having to shell out additional money.
Takeaway: Redo clauses state what should happen if work isn’t up to standard and how it will be revised, along with who takes responsibility for the expenses.
4. Delay, Theft, and Damage Provisions
It’s common for building projects to experience losses and/or delays. This is why clients want to know that there are processes in place if these situations arise. They want to protect their finances while ensuring operations can continue in a timely way.
Takeaway: The agreement needs to specify what constitutes a valid delay and provide plans for how to navigate it. This should include compensation and solutions.
5. Use of Standard Contract Templates
Contract templates, such as one by the AIA (American Institute of Architects) can be helpful for clients to ensure compliance and familiarity, especially if they are unsure of how to go about the drafting process.
Takeaway: If clients are using standard templates, they need to be customized to ensure the clauses match the scope of the work. They might also require additional clauses that are specific to their projects.
6. Payment Enforcement and Penalties
If there is a delay in payment, or it just doesn’t occur, clients need protection. They don’t want issues such as bounced checks to prevent them from meeting their project goals.
Takeaway: The contract should include balanced and fair payment terms and how they can be enforced to protect the client against losses.
Why This Matters
My team’s project data clearly shows that construction agreements must contain customized terms. These lower risks in construction that can be highly damaging. A contract must have clear payment plans, defined quality standards, and provisions concerning situations such as delays completing projects successfully.
Get Help With Your Construction Services Agreement
If you require a construction services agreement written or reviewed by a lawyer, you can post your request on ContractsCounsel. You’ll get proposals from vetted, experienced construction lawyers. They’ll be able to customize your contract to match your project and company’s needs, reducing your stress and helping you have peace of mind.
