So you’ve signed up to a contract. You’ve agreed on any changes and ensured the balance of risk is even and, as far as possible, minimises unnecessary risk. That’s all sorted, so you can pop it in a drawer, get the construction underway, and not worry about that tedious piece of paper again, right?
Wrong.
Occasionally, we come across projects where the contract has been left slightly unloved. Like an old sofa, sitting in the corner of the room – it’s a bit moth-eaten. Maybe the dog jumped on it once too often, but it’s still there, waiting to be loved again!
But something has gone slightly wrong. The project is late, or the budget is blown, and someone comes to us, or a solicitor and asks, “What should we do now?”.
The first thing we’ll do is ask, “Well, what does the contract say?”.
Because the contract is the first point of call for most eventualities. Usually, the problem you’ve encountered will have arisen before, so the contract will tell you what to do. Or what you should have done.
And if your unloved contract is too neglected, much like your sofa, you might just find it’s no good to you! If left neglected for too long, both sofa and contract might let you down, or at least trip you up.
Top Reasons to Check the Contract
So what are the key reasons for regularly keeping one eye on the contract (and any associated documents)?
- Understanding rights and responsibilities: The contract outlines the terms and conditions (rules of the game) agreed upon by both parties. By reviewing it thoroughly, you can ensure you understand your rights obligations and responsibilities, and those of the other parties. Knowing who should be doing what is crucial.
- Clarifying Scope of Work: The contract specifies the scope of work to be performed. It may include detailed descriptions of the construction project, materials, timelines, and milestones. Reviewing this ensures that both parties are on the same page regarding project expectations and deliverables.
- Costs and Payment Terms: Contracts typically detail the total project cost, payment schedule, and penalties or incentives related to project completion. By reviewing these sections, you can confirm that the financial terms align with your expectations and budget. Payment terms and periods are crucial, particularly when it comes to disputes .
- Legal Protections: The contract will certainly include clauses related to dispute resolution, warranties, insurance requirements, and liability limitations. Knowing and understanding those requirements will help protect your interests throughout the project, especially if there is a disagreement.
- Quality and Standards: The contract will probably outline quality standards and specifications for materials and workmanship. Reviewing these details helps ensure that the construction meets everyone’s expectations and complies with industry standards. Be very careful of differing references to standards (which is a common issue). The contract should be clear about the required standard and which takes precedence where multiple standards or specifications exist.
- Identifying Risks: By carefully examining the contract, you can identify potential risks or areas of concern that may impact the success of the project. This allows you to address these issues proactively and mitigate any potential negative consequences.
- Compliance with Regulations: Contracts often include provisions related to regulatory compliance, permits, zoning requirements, and environmental regulations. Ensuring that the project adheres to these regulations from the outset can prevent costly delays or legal issues down the line.
Conclusion
Checking your construction contract is essential to protect your interests, minimising risks, and ensuring the successful completion of your project. If you have any concerns or questions about a contract you have been presented with, seek assistance from legal or contract / commercial professionals before signing.
Finally – remember that one contract does not necessarily fit all circumstances.
