A contract outlining the terms of a transaction is not the only real estate agreement signed. Construction contracts are another commonly used agreement. These address many different concerns in specific terms. Overall, the construction contract can help both parties know what to expect and avoid any unwanted surprises. Once signed, they are generally binding unless both sides decide to modify the agreement.
Common areas covered
Each agreement is unique to the circumstances it covers, but some common areas to work out include:
- Time frame: The only occurrence rarer than under budget is hitting deadlines early. This can help keep contractors or construction companies accountable.
- Price: The contract should clearly state the estimated cost. The parties can then address overruns and the cost for extras as they crop up.
- Payment terms: This indicates when payments are due, such as the end of the month, when most contractors or builders’ bills are due. It can also outline penalties for late payments.
- Material terms: This applies to the goods and services involved, such as the roof tiles’ color and design.
- Dispute resolution: Many contracts include an arbitration clause rather than settling issues through litigation.
- Inability to agree: Some details may not be finalized before the project begins. These should not be enforceable until there is a binding agreement that outlines these completed details.
Get legal advice before signing
Every contract should have fair and equitable conditions, but some may not consider this to be in their best interests. So it is essential to have a real estate law attorney review a construction contract before the client signs. These legal professionals can help identify unfair terms, unintentional oversites and potential areas of dispute.