5 Things to avoid when drafting a construction contract

5 Things to avoid when drafting a construction contract

Drafting a construction contract is million times more difficult than signing it in seconds. There are many significant statements and conditions that you should indicate because if not, you will end up in a dispute or worse, in court trials. When this happens, the project might impede and will cost you a lot.

From making a subcontractor statement, reviewing the documents to making permits, all of these are exasperating.

For some building projects, having a contract is unnecessary. Both sides will just discuss the scope of work, design plans, and target budget. Just to tell you, this is crucial and risky. As we always say, nothing is real until the contract is signed. You need to be legal and professional when it comes to these. We’re talking about a huge amount here.

Aside from knowing the important clauses that you should add, it is best to know the things you must avoid and not include at all. Check out these clauses that typically found in a contract but should not be included.

1.Legalese

Legalese refers to the formal and technical statements used in many legal documents.  It is usually used to save time because it can be difficult to explain a legal concept. In short it is used to make a brief about the idea. But, construction contracts are hard to understand therefore adding legalese or archaic phrases will just make the contracts more complex. It is usually used to saves time because it can be difficult to explain a legal concept.  

However, using legalese is not that bad because there is a specific time and place to use it properly. And typical builders and contractors will not understand such legal terms.

2.Long sentences

Be straight to the point. Using long sentences can be so hard to understand. Short sentences are basically much easier to read and digest. Be concise and address only the matters that demands proper elaboration. Breaking the thoughts into clear and short sentences is an ideal. By doing this, you can avoid confusion.

3.Repetitive clauses and statements

Repetition is mostly unnecessary. If you want to emphasize a specific clause you can just underline the statement or just mention it to the other contractual party. You can also refer back to a previous provision according to its corresponding number or heading.

However, repetition is sometimes necessary for some contracts.

4.Undocumented variations and modification

Changes made in a contract should be well-documented because it can be the root of disputes as the project starts. Don’t memorize the modification. Write the changes in a document and have the contractual parties signed it.

A contract variation refers to any adjustments made to the scope of works in a construction contract. Details may be added, substituted or omitted from the original scope of works. All variations must be in form of writing.

5.Using a construction contract without review

Using the standard form of construction contract is not automatically translate to effective. A lawyer is needed to do contract review if it is legally doable. It is still better to consult an expert rather than risking yourself from costly and complicated dispute. The lawyer will review the most important points in a contract such as the payment terms, scope of work, insurances, dispute resolution, and special conditions.

A standard contract may work well for instance but it is better to be secure rather than suffer afterwards.

LEAVE A REPLY

Please enter your comment!
Please enter your name here