The Importance of Proper Contracts

11.12.2015
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Construction and Landscaping Contracts

In the world of Construction and Landscaping, proper contracting skills are a must. This can seem like a daunting task to undertake while you’re busy running a business, but in the end having a good contract and using it effectively can save you time and money, as well as increase customer satisfaction and reduce disputes.

The contract is about defining the relationships, roles, and responsibilities of each party. It will determine what is to be done, when it is to be done, where it is to be done, how much it will cost, and will define who is performing the tasks. In the event of a disagreement, parties will look to the contract for how issues will be handled. Every project is different, so it’s important to complete the fill-in portions of the contract accurately for each job. Additionally, review the fixed terms in your agreement to make sure each term applies to each specific situation. If a dispute arises, all parties will look to the contract for the terms.

Example

Party A contracts with Party B for Party B to complete a build a retaining wall on Party A’s property. But neither Party A nor Party B specify a time frame for the project to be completed. Party A is anticipating the project would be complete in three weeks’ time and makes a payment based on that analysis. Yet Party B was never planning on being able to complete the project that quickly. Because Party A does not have what it wanted, it terminates the contract. Would Party B be required to return the money paid? While the answer may seem obvious, the real answer is, look at the contract. What if Party B believes it was wrongly terminated? Was Party A justified in terminating Party B under the contracted for terms?

Contract Fields that Should be Included

As you can see, disputes often lead to rabbit-hole type of questions, but those questions will need to be answered. And the best way to get those answers is to have a well-written complete contract by developing good contracting skills and utilizing proper contracts.
Your contract should contain fields that you complete for each job, such as the scope of work, materials list, dates for estimated start and completion, etc. Your contract should also include standard provisions that will apply to most or all of your jobs. For a construction or landscaping contract, these can include are: 1) a utilities clause that lays out who is responsible for marking private and public utilities; 2) a promotional use clause that allows you to take and use pictures of the job for promotional purposes; 3) an attachments or mergers clause that references and includes related documents, such as a bid sheet, diagram, change order, or other important document; 4) a termination clause that states how the parties can end the contract if necessary; 2) Governing Law and Choice of Law provision that determines what state’s law is applied to the contract as well as where any disputes will be litigated; 3) Notice Provision (will specify the location where notice of any disputes can be sent); 5) Warranty and Indemnity Clauses specifying that one party may hold the other party harmless for certain activity or legal purpose; 6) Amendments (specifying how changes and modifications to the contract can be made).

Let us help!

If you’d like to have a new contract created or to have an existing contract reviewed or revised, contact the attorneys at Zlimen & McGuiness before you head out to your next job.

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