CONTRACTOR CONTRACT CONSIDERATIONS
Now, more than ever, contractors and tradespeople need to be aware of what contracts they are signing. While some clients may use a standard document, others may have a bespoke contract that they prepared themselves. It doesn’t matter which one you’re signing, you should be aware of the terms and obligations required from you. As a contractor, pay attention to the following:
- Project supervisor requirements
Contractors and tradespeople are obliged to inform a client whether or not a project supervisor should be appointed. If a contractor agrees to take on this role, they need to be aware of their obligations in carrying it out.
- The price of work
The scope of the works to be completed should be clearly agreed and understood by both the contractor and the client. If necessary, refer to the plans and drawings linked to the contract. The pricing structure should also cover any agreed variations to the original works.
- Timeframe for the completion of the works
The timeframe for carrying out the work should clearly be outlined and agreed upon. Contractors should also note if there are any time penalty clauses in the contract. They should also be aware of any restrictions in the working hours on the site, and how these will impact them.
- Insurance and liability for injuries
Every contractor should ensure that they have adequate insurance in place before beginning their work. In case of larger contractors, it may be necessary to purchase additional insurance. All contractors should deal with potential claims of injury or death due to negligence, and the contract should contain appropriate indemnity clauses.
- Payment Terms
Payment terms are essential for building contracts to manage the cash flow effectively. Contractors should know whether their clients provide advance payments and prepare the contract accordingly. If advance payment is agreed between you and the client, make sure to include the date of claim submission and period of progress in the contract document.
- Variation Clause
The variation clause is one of the most important aspects to be reviewed in the building contracts. Possible variations can occur in most construction projects with additions or omissions to the original scope of work. Therefore, make sure to include a clause in your contract concerning identifying and responding to variations to avoid disputes.
- Dispute Resolution
Determine and include how you want to resolve disputes that may arise during the project, either by negotiation, arbitration, or mediation. You can also consider alternative dispute resolution methods depending on the complexity of the problems that need to be fixed.
- Rights and Responsibilities
Clearly state your rights and responsibilities while explaining who is responsible if something does not happen as mentioned in the contract.
- Causes for Termination
Include ways to terminate the contract for a cause or without a cause if it does not work to your benefit. This will help you avoid getting locked into a contract.
- No Blank Spaces
Make sure to remove or fill in any blank spaces in your contract before signing it in order to avoid costly consequences.