Take a second to think about your last construction-related dispute. Do you remember what the source of the conflict was? In many cases, a dispute can be traced back to a faulty or erroneous contract. Thinking back now, you probably regret signing that contract, but hindsight is 20/20, and there’s nothing you can do about it now.
The good news is that you can greatly reduce your likelihood of becoming ensnared in future disputes by having a Houston construction attorney review your contracts in advance. This simple service has been proven to be an effective countermeasure against bad contracts. In this three-part series, our Houston construction attorneys will discuss several contract documents that are commonly used in the construction industry and provide examples of how these documents can affect your projects.
Construction Contract Agreement
This is the most basic component of any construction contract. Without a construction contract agreement, there is no formal agreement to perform the work detailed in the design specifications. As the principal agreement between the contractor and the owner, the construction contract agreement forms the foundation of a contract. The other components of your contract, including the scope of work and construction schedule (which we’ll discuss below), will be assembled around this agreement.
Scope of Work
A clear scope of work is essential to any successful project. This document outlines the work to be done and asserts that any necessary work falling outside the scope of work will require additional compensation at the owner’s expense. Depending on your contract, this document may also be referred to as the “statement of work.” Some of the fundamental aspects of scope of work include a description of the work to be done, a statement clarifying who is responsible for the completion of said work, the techniques that should be employed to complete the project, and precise information detailing the materials that are to be used on the project. Another important aspect of scope of work is that it contains terms and conditions for handling change orders. Having a clear policy relating to change orders is important if you want to avoid scope creep and keep your projects on time and under budget.
Another important component of any construction contract is the construction schedule. This document provides clear documentation explaining when a project will reach completion. It also details how to deal with scheduling problems. You may be required to update the construction schedule periodically throughout the project to provide increasingly accurate estimates. Depending on the type of contract you sign, the dissemination of payments may be based on the construction schedule. When you fall behind schedule, whether it’s your fault or not, consult a Houston construction attorney to see if you or the owner are responsible for footing the bill.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.