Contracts With General Contractors
HandelontheLaw.com Staff Writer
Hiring a general contractor can be a daunting task. There are a number of very important factors and issues to consider in such an important undertaking. Above and beyond normal contractual issues, contracts with general contractors for home improvements require special considerations.
First, since contractors typically use their own contract forms, you should have the proposed contract reviewed by a lawyer experienced in contracts and construction litigation.
Secondly, the contract should specifically state all plans, specifications, materials, subcontractors and required permits, along with a provision for any changes that requires written and countersigned amendments to the contract.
Third, you should control the project by controlling the money: the contract should include a schedule of performance and payments, with final payment being contingent on completion of the work and proof of full payments to subcontractors.
Fourth, payment of those subcontractors should be assured, ideally through the general contractor’s payment bond ensuring that subcontractors are paid, but definitely through all subcontractors’ lien releases collected and presented to you by the general contractor.
Fifth, the contract should include the general contractor’s assurance that he/she is not receiving money from subcontractors in exchange for using them on your project.
Sixth, the contract should show a bid summary of at least three quotes for every major expense of the project.
Seventh, the contract should provide for the possibility of disputes by ensuring that disputes will be resolved in your own jurisdiction and that the parties will use party-to-party negotiations, resolution programs with state/country agencies, mediation or binding arbitration before resorting to small claims court or higher courts.
DO’S AND DON’TS
DO have the contract reviewed by a lawyer specializing in contracts and construction litigation.
DO specify plans, specifications, materials, subcontractors, permits, and a provision for changes.
DO control the project by controlling the money through a schedule of performance/payments.
DO assure proof of subcontractor payments.
DO include the general contractor’s assurance of not receiving money from subcontractors.
DO require a bid summary of at least three quotes for every major expense of the project.
DO provide for the possibility of disputes by ensuring jurisdiction and alternatives to court.
By Kathy Catanzarite
Note from HandelontheLaw.com: This article is to be used as an educational guide only and should not be interpreted as a legal consultation. Readers of this article are advised to seek an attorney if a legal consultation is needed. Laws may vary by state and are subject to change, thus the accuracy of this information can not be guaranteed. Readers act on this information solely at their own risk. Neither the author, handelonthelaw.com, or any of its affiliates shall have any liability stemming from this article.
CONTRACT LAW DOS AND DON'TS