📄 Construction Contract

Why You Need a Written Contract

A construction contract is a legally binding agreement between you and your client that defines the scope of work, payment terms, timelines, and responsibilities. Operating without one is like building without blueprints — you're asking for disputes, payment delays, and potential legal problems.

Essential Elements

• Parties: Full legal names and addresses of all parties
• Scope of work: Detailed description of what you'll do (and won't do)
• Payment terms: Total price, deposit amount, progress payments, final payment
• Timeline: Start date, completion date, milestones
• Materials: Who provides what, quality standards, allowances
• Change orders: How changes are requested, priced, and approved
• Warranties: Workmanship and material warranties
• Insurance: Required coverage and certificates
• Dispute resolution: Mediation, arbitration, or litigation process
• Termination: How either party can end the contract

State-Specific Requirements

Many states have specific requirements for construction contracts, including:

• California: Must include license number, notice of lien rights, and specific cancellation language
• New York: Home improvement contracts require specific disclosures
• Florida: Must include notice of right to cancel and lien warning
• Texas: Residential contracts require specific payment and performance disclosures
• Many states: Require notice of pre-existing liens or property encumbrances

Payment Terms Best Practices

• Never front all costs: Get a deposit (typically 10-30%)
• Milestone payments: Tie payments to completed work, not dates
• Retainage: Expect 5-10% held until final completion
• Final payment: Due upon substantial completion, not final punch list
• Late fees: Specify interest rate for overdue payments
• Stop work rights: Reserve right to stop work if payments are late

Change Orders

Changes are inevitable in construction. Your contract should require:

• Written change order requests
• Detailed description of the change
• Price adjustment (up or down)
• Timeline impact
• Signed approval before work begins

Golden rule: No written change order = no extra work.