5 Terms You Should Know Before Signing A Construction Contract

A well-drafted construction agreement typically specifies three basic things:

• the work to be performed and its date of completion;
• all associated costs with the new construction service; and
• how disputes are handled.

Unfortunately, life isn’t so simple; thus, we need give more robust consideration and awareness of foreseeable circumstances regarding construction contracts in New York.

As the legal industry moves away from complicated “legalese,” there is still plenty of it in circulation. Signees find themselves questioning whether or not he or she should sign the contract presented.

Consider These 5 Items for a Better Outcome

Prior to signing any contract, familiarize yourself with a few basic terms and conditions. Utilize the following list of 5 things to think of prior to signing an agreement as a basic guide or inspiration for your existing contract:

1.    Specify the Scope and Depth of Timeframes and Deliverables

The contract needs to have a clear frame of time if any element of work will take place in the future. Make sure that the construction company is realistic about project completion dates. Assign a penalty fee for late delivery due to negligence.

2.    Costs and Fees Associated with All Work

The arrangement must clearly specify costs and fees up-front. Watch out for surcharges that have not been discussed by the construction company with you. .Avoid this dissonance by ensuring that you understand exactly what the extra charges are and request a full quote.

3.    Failure to Agree: Terms and Conditions for an Urgent Matter

By failing to agree on the terms and conditions proposed in the initial contract, it can make things a bit difficult if you have to have work begin on your project right away. The number one consideration for this issue is to make sure that you add a clause to the first contract:

“This temporary contract is only effective until a more long-term contract can be worked out by both parties.”

The last thing you want to do is be a part of a contract that is binding as soon as the crew appears on-site at your New York property.

4.    Resolution of Early Anticipated Disputes between the Two Entities

No matter how mindful you are or how great your relationship with the other party is, a disagreement could emerge and ruin the project completely. A good agreement consists of an arbitration stipulation, which suggests that a conflict should be settled in arbitration rather than in court.

Arbitration is generally less expensive. However, if you sign an agreement that includes an arbitration clause, you have most likely waived your right to take potential issues to court.

5.    Anticipated Problems Later in the Project

Clearly delineate how unexpected problems, that could arise in the midst of the project’s work, are treated. For example, you could add a paragraph that describes how delays are to be communicated within 24 hours of discovery. By anticipating problems at the start, you can avoid a lot of stress and expensive mistakes.

Final Thoughts and Considerations

Construction agreements need to be carefully reviewed prior to any party affixing their signature to such an important agreement. Usually, a construction company will guarantee its work for a given period of time. Some property owners have found themselves abandoned or repeatedly ignored regarding construction flaws.

Working with a real estate attorney licensed in New York can help you protect yourself from this type of treatment. Schedule a time to meet so that he or she can give you a preliminary evaluation of the proposed contract.

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