Construction and home improvement work can be costly and complicated. Often, you won’t anticipate the whole scope of the project. Things can change in an instant when you discover a unexpected problem. Because so much can change during the course of a project, having a written contract is essential to protect both your crew and your client.
Even for small projects, a written contract will give you clear guidelines for the project and a way to solve any problems that arise. Contracts should be written for the relationship between the client and the general contractor, as well as between the general contractor and any subcontractors who work on the project.
A written contact creates a clear road map of the project
It’s easy to forget what you’ve discussed and if all the details of a project have been approved. In a written contract, both parties must clearly state what they want the finished product to look like, who is doing the work, what each party’s responsibilities are, and more. You can’t assume that a homeowner will understand the extent of a project, or that they can clearly communicate what they want the finished product to look like.
All the details should be ironed out in the contract so you can give an accurate cost and time frame for completion. The property owner should also understand what is and is not included in your work. There should be no surprises for anyone at the end.
A written contract forces everyone to communicate
When writing a contract, you will be able to see if there are any holes in the plan. If the client hasn’t decided on the color of a wall or the exact bathroom fixtures, they will need to make a decision before work begins. If there are questions, you will have a chance to answer those when discussing the contract.
Your contract should also explain how to deal with changes. There should be no question of how to go about making changes to the original project, regardless of who initiates them.
A contract will ensure that you are paid for your work
You contract should spell out exactly when you will be paid and how much. This can be determined by dates or by milestones. You will know what the expectations for payment are, and the customer will know exactly when to pay their bill. Your preferred method of payment should also be explicit in the contract.
Contracts reduce the likelihood of lawsuits
A well-written contract protects both parties in case something goes wrong. It should detail who is responsible for various aspects of the project, and what must be paid by each in the event of an accident. A clear contract will leave no question about what should happen when there is a problem or conflict.
Risk does not have to be assumed completely by one party. Often, the contract states how extra costs will be divided between all those involved.
If there is a conflict when you don’t have a written contract, solutions will be based on imperfect memories of conversations that may have happened months ago.
Each state has standard terms they default to when there is no contract for construction and home improvement projects. These terms are likely not the same as an oral agreement you had with a property owner. However, the courts will only consider these default terms if you don’t have a contract to submit for the final decision.
If your contract is specific about responsibilities, it will greatly reduce the amount of time and confusion spent in court cases.
Contracts are essential for any working relationship. Even between friends and acquaintances, it’s not a sign of mistrust. It’s a document that is intended to protect both parties. It’s a safety net that every professional needs and a skill that will help your business succeed.