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General construction contracts are legal agreements between the contractor and the client, detailing the work to be done, payment terms, dispute resolution, and other important matters. It is important to choose a suitable contractor, tailor the contract to the project’s unique requirements, and clarify all clauses before signing. The contract should also include terms for mediation, jurisdiction, and arbitration to resolve disputes.
General construction contracts are an agreement between the party carrying out the construction work and the person who will carry out the construction work, assisted by a third party. The contract generally contains details of the type of work to be performed, a time frame for completion, completion criteria, payment terms, dispute resolution terms, termination terms, ownership of the work and any other matter that the first two parties deem it necessary to keep discus. It is a binding legal contract that both parties must abide by, otherwise a court ruling can be sought if either party fails to meet it.
It doesn’t matter if the job is big or small. General construction contracts save real time. Risks are reduced as all aspects of the job are detailed and agreed upfront in the contract, for the benefit of both parties. The contract also avoids unnecessary disagreements, frustrations and lawsuits if the details are sufficiently worked out, discussed and formalized by all parties to the agreement.
Before commencing general construction contracts, a suitable contractor must be identified. Some important aspects should be looked into, understood and resolved before selecting the right contractor. A recommended contractor would be a better option than someone totally unknown. Friends or colleagues should be able to advise and provide insight into timely completion details, budget constraints, and respecting an initial contact.
General construction contracts should be tailored to meet the unique requirements of the project. The agreement must cover the scope of the work and could be detailed in specifications, including final drawings. These should form an integral part of the agreement. The part of the work which is not covered by the agreement should also be unambiguously mentioned. The contract should include the method of handling variations in orders which may occur during the life of the project and which are not originally contemplated in the initial scope of work.
It is very important that the general construction contract is thoroughly understood and all clauses clarified before final signing. Arbitrary terms that are not in the best interests of either party should be removed. Legal advice may be sought for the inclusion or interpretation of some of the legal aspects. It is preferable to avoid a commitment to possible cost increases after the entry into force of the agreement. Substitution of materials specified by the contractor should also not be agreed. It should also be the contractor’s responsibility to clean up after the construction work is complete.
The construction contract should contain the terms of payment, the timetable and the methods of payment. Payment could be made by the landlord or by a financial institution on his behalf. Mandatory inclusions should be made for start and completion dates, construction times, warranties on workmanship and materials, details of assurances from all parties, defaults, interference, material properties, and safety.
It is vitally important to reserve certain clauses in construction contracts for mediation, jurisdiction and arbitration. Dispute resolution through arbitration is often more effective in both time and expense. General construction contracts should be drafted to provide for arbitration as well as the right to go to court. Discussing the matter beforehand and reaching mutual agreement on the course of action will generally ease tensions on both sides.
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