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Construction Contract Review Checklist

In this article, we give you a quick list of what to look out for when you do your own construction contract review.
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Construction Contracts

Though construction contracts may at first glance seem like a daunting and confusing mess of legal jargon, they can actually be quite straightforward if you take the time to read them thoroughly. Sometimes these documents are so long-winded that it’s difficult for people who aren’t trained in contract law to simply read through everything without getting overwhelmed with details. As every reputable business person knows: Reading is fundamental when signing any kind of agreement because there could always be something else tucked away inside those small print pages which might surprise us later on and can cost plenty more money.

A. Check the Essential Terms

What are essential terms?

There are a number of essential terms that must be agreed upon in order for any construction contract to be valid. These include project deadlines and scope of work. So if you don’t agree with your contractor on these issues, then there will never be an agreement between you two, because without this basic premise nothing can happen – meaning no work gets done or begun.

B. Check the Important Clauses

What are the Important Clauses?

Important clauses to look out for include those that are related to Time, Cost, and Build Quality.

In addition to the payment schedule, one must consider how that payment will be made. There are many different options for this, including lump sum or cost plus.

Before you sign your contract, it’s important to be aware of what will happen should there be any issues with the other party. 

Clauses on termination and breach should also exist, and a specific procedure on how these situations can be resolved and where.

Pay special attention to the following:

  • Building Period
  • Progress Payments
  • Variations Clause
  • Defects and Rectification Clause
  • Termination Clause
  • Dispute Resolution Clause

C. Exercise Caution; Check the Liability Clauses

Most standard form contracts are typically written to favor the builder, so you need to be wary of clauses that completely pass the liability and burden on to you.

• No Damage for Delay Provision – The delays caused by construction can often lead to a lot of damage and expense. This provision prevents you from claiming damages when the contractor incurs delay in building your new home. If you see this provision, you may need to sit down and negotiate with the builder.
• Indemnity Provision or Clause – this clause requires one party to assume responsibility for third party claims made against the other party. Read this carefully to make sure you are clear on who is responsible for third party claims.
• Contractors Review of Documents - This is a good clause to have, as it protects the owner should building defects develop. A Contractors Review of Documents Provisions is included in most home construction contracts.

How We Can Help

Of course, it’s always a good idea to engage a professional to review your contract, to make sure you’ve got all bases covered. It is an investment that will help you minimise your risks to time, cost, and build quality. 

Construction Lawyer Brisbane has been practicing Construction Law for more than a decade now, and has a team of experts whose niche specialisation is Construction Contract Review and Advice.

Should you need assistance with your construction contract, feel free to give us a call. First consult is free.

John Dela Cruz
John Dela Cruz
John Dela Cruz is the Principal Lawyer of Construction Lawyer Brisbane.
In 2011, John founded the firm, bringing with him extensive, invaluable experience from having held several industry management roles.
Tags

Home building contracts

clb home building contract

home building contract nsw

fair trade contract

home building act

Home building compensation fund

building warranty

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Construction Contract Review Checklist
Construction Contract Review Checklist
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