GrandberrySo121

De BISAWiki

So youve got your click for source your permits in hand a pile of money lined up your Contractors reviewed and selected and a gleam in your eye Well hang on The most important step is yet to come before one nail hits the job Now you have to decide how well you are going to REALLY limit your risk

The first concept to get your head firmly wrapped around is this

If you didnt get it in writing it NEVER HAPPENED Period

This is so important I cant stress the concept enough I dont care if its your brothers buddy or your Uncle John- a construction project where money changes hands in return for work is a Business Arrangement and should be dealt with accordingly If not you can leave yourself open to a huge risk of loss both financially and spiritually No reputable contractor will have any problem whatsoever with preparing and executing a written agreement on a project- no matter WHO they are to you personally In fact they will admire and respect your intelligence and responsibility You see a properly drafted contract protects them as much as it does you

The actual Contract need not be elaborate but there are certain sections that are vital The first is the names of the parties or entities executing the agreement the date the agreement is being entered into and the legal description of the property being improved If it is an established structure with a postal address that full address is usually sufficient If raw land or an unimproved lot you will need to list the survey information which includes the County Township Section and Range among other details You can get this information from the title or deed or from your local County or Township Government offices

Second you should clearly list the entire scope of work If you are acting as the General Contractor you will need to prepare a separate contract for each Sub-Contractor If you dont have drawings and specifications for the project you will want to list exactly what you are expecting to be done for example remove and dispose of existing kitchen countertops Provide and install new countertops and 4 back splash as manufactured by insert vendor style insert style and type color insert color You dont need to list every screw and nail however the standard of work statement All work shall be performed in a competent workmanlike fashion following accepted industry trade practices should be included This allows you to have an impartial third party expert inspect the work and give an opinion as to the suitability of the work in case of a dispute or before making final payment see chapter on close out

A quick and clean way to enumerate the scope of work is to attach the quote to the contract as Exhibits If you are satisfied that the quote you received from your chosen contractor is detailed enough simply call it out in the contract for example All work to be as per the quote for short description here prepared by contractor name dated date here which is hereby attached as exhibit A B etc and is/are included by reference If you have drawings include a reference to them as well and list all pages such as And/Or as per the drawings and specifications as prepared by Architect or designer here dated date here revisions if any sheets list all A-1 A-2 E-1 etc and is/are included by reference After the detailed scope of work remember to include the Standard of Work statement from the last section

Third list any special conditions for the project such as the process for dealing with change orders working times Insurances to be provided both by the owner and the contractor who is responsible for the permits and calling for inspections allowability of overtime performance schedules and/or expected date of completion Milestone descriptions and target dates etc Always require a schedule from your contractor This can be as elaborate as you like such as a formal spreadsheet type Gantt chart or as simple as a wall calendar marked up and initialed by both parties and included by reference in the contract This schedule must of course be somewhat flexible and include time for weather delays material shortages and acts of God among other variables but it should NOT be open-ended

Finally we come to the Payment terms These should include the statement Contractor agrees to perform all work as specified pursuant to the terms of this contract along with all exhibits and attachments for the sum of list contract sum here to be paid as follows list payment schedule here

Again the terms of payment may be as elaborate as you care to make them I always recommend that any and all payments be tied to performance of some specific milestone or event such as xx down xx upon completion of foundation work and backfilling xx upon completion of rough framing and exterior enclosure etcTrust me your contractor may not like this but be adamant You have NO OTHER stick to beat them with except your checkbook Use it firmly but fairly Once again a reputable and honest contractor should have no problem with this it is actually to their benefit as it clearly defines when they are going to get paid as well If they want to get paid they have to perform Simple as that

Last but not least include places for all parties involved to sign and date the Contract In the case of a private property all persons listed on the title should sign husband and wife both all partners etc In the footer include a statement detailing how a dispute will be resolved and where I live near my state border and there are a lot of contractors that cross the line to work If you dont want to have to travel in case of a suit being filed against you out of area you should call out what state and court system to be used in case of a dispute such as This contract shall be administered under the laws of the state of insert state read the article Venue for any dispute shall be the insert judicial circuit or court and county

In closing lets summarize what the contract should include

   Names of parties to the Contract
   Date Contract entered into
   Detailed scope of work and document references
   Special conditions to the Contract
   Schedules and Milestones
   Payment amounts and terms
   Signatures of all parties involved with dates
   Venue for dispute resolution

Following these simple rules will help ensure that you have a good experience with your project and go a long way towards avoiding disputes Disclaimer The Author while an experienced Contractor and Construction Manager is NOT an attorney and no part of this article should be construed as the giving of legal advice Contract laws vary widely from state to state and can be very complex depending on the scope of the project You are encouraged to seek competent legal advice from a licensed Attorney before relying on any information or language in this article and before executing any contract

Glenn R Grundberg BSEE RCDD/lan IBEW JW is an Electrical Contractor Master Electrician and Low-Voltage and Communications Expert Certified by BICSI and several Major Hardware Manufacturers Mr Grundberg writes on a variety of subjects and Consults on Major Construction Projects Worldwide and sits on several Codes and Standards Commitees Including the NFPA 72 for Fire Alarms Mr Grundberg is also an Active Internet Marketer specializing in Affiliate Products and Programs see this here