Construction Contract
People would always want to have a safe place they can call home. But there is no house without the professionals and experts in the field. Today, there is growth in the construction industry. You can see it through the neighboring cities; there are tall buildings, sleek facade, and modernized designs. But little did you know, residential and commercial buildings also needs remodeling. So, who do you call? Homeowners and entrepreneurs ask help from contractors, engineers, and architects. With that, both parties must come up with a written construction contract to secure the housing project. Check out the following contract examples to know how you can start.
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What Is a Construction Contract?
A construction contract is a legal document binding two parties through an agreement. It contains vital information that secures both parties’ responsibilities throughout the construction process. Such information includes the terms and conditions, payment method and schedule, and the list of services.
Today’s Construction Data
As establishments grow in number, we can expect that firms will double their population too. According to the data analysis published by AGC The Construction Association, the US recorded 680,000 construction employers. This report identifies the construction industry as among the highest contributors to the continuous rise of the US economy. We can also link this progress with the expansion of the real estate industry. If this number has been around recently, what more can we expect in the coming years?
How To Write a Construction Contract
Construction contracts are developed to ensure a clear understanding of the deliverable that all stakeholders can expect. Aside from the terms and conditions, outlining the budget breakdown is part of the document’s essential element. To thoroughly explain the steps, follow the guide below.
1. Highlight the Title and Letterhead
When writing a construction agreement, begin by highlighting the title. By reading the title, the client and users must already distinguish its purpose. The letterhead must feature the brand of the company. Here, add a unique logo. Brand exposures enhance your credibility, so always make sure to include this letterhead in your document.
2. Describe the Services
Next, write a concrete list of the work that will be done. Do you need a bathroom repair? Is your patio Aside from a contract checklist to ensure that you describe the construction tasks that you will perform. Include the tools and equipment that you will use to complete the process. Make sure to be more specific for the benefit of your client.
3. Incorporate the Financial Information
Now, state the exact amount of money that the client will take responsibility to pay. For a simple construction contract, the financial statement is an absolute necessity. Be sure to write down the price of labor, resources, and other charges. For example, when three hundred packs of tile costs at $1000, make sure that you include the tax or vat. A predetermined fixed price helps the client secure the budget.
4. Write Down the Terms and Conditions
In this section, clarity and preciseness are essential. You have to input the payment schedule and methods that the client must comply with. Then, follow it up with the basic terms and conditions, such as the termination, cancellation, and refunds policy. Make sure that you don’t miss anything because this section secures your rules as a company.
5. Make a Signature Line
Review your form to make sure it is error-free. Then, the signature line must be in the bottom part of the document. When both parties sign, make sure to state the complete name.
FAQ’s
What are the three types of a construction contract?
Among the various types, the lump sum, commercial, and percentage rate contract are the most common.
What are the types of construction?
Construction has four types. This includes institutional or commercial building, residential building, infrastructure, and industrial.
What are the phases of construction?
The phases of construction include the initiation, planning, execution, monitoring, and finishing.
Building a commercial or residential establishment is not easy. People can now request certain features they want for their properties. But there are particular considerations that the contractors need to follow. Part of that is to prepare a contract upon closing deals with a client. So, as you go through the process, do not forget to follow the steps above. Make a comprehensive document so that you can build a good name in the industry.
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