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Construction law: The elements of a construction contract

Many construction companies in New York and New Jersey take on multiple projects each year. Upon reaching an agreement for work with another party, it is generally advisable to put the terms of the agreement in writing with a formal written contract. Because construction contracts can be exceedingly complex, contractors should speak with someone with experience in construction law to ensure that all necessary clauses are included.

One of the first topics to cover in a Construction Contract pertains to the nature of the work required. Listing a detailed description of the work (i.e., a "Scope of Work") will better ensure that a contractor is not required to perform free work. A clear Scope of Work also makes it easier for a contractor to seek change orders for extra work. Finally, a clear Scope of Work makes it easier to prepare a fair and equitable Schedule of Values so that a contractor can be properly paid for its work as the project progresses.

A good Construction Attorney can help with the preparation of a detailed Scope of Work, but it is the contractor that must be prepared to dedicate the time to ensure that the Scope of Work is accurate.

A construction contract may also dictate the responsibilities of all parties involved. In addition, this document can depict the penalties for failing to adhere to the terms of the agreement. Each party may also wish to implement terms and conditions concerning how to handle any disputes that may arise, as well as how the agreement may be terminated. A construction company could also find it necessary to compile a list of all the documents listed in the contract for future reference.

Construction companies generally wish to protect their business interests upon accepting a new project by implementing a written contract. Since this can be a complex process, an owner could choose to consult an attorney for guidance. A construction law attorney can help a client in New York in negotiating and preparing a contract, and provide further assistance should disputes arise in the future.

Source: thebalance.com, "What is A Construction Contract Agreement?," Juan Rodriguez, accessed on Jan. 16, 2018

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