How to Write a Construction Contract

1. Introduction and Overview

Contracts are a staple of construction, and understanding them can give you agency as a small business owner. Karalynn explains why everyone should know their way around a legal agreement.

2. General Information

Karalynn reviews the three components of General Information: Parties, or who’s involved; Notice, or how the parties plan to communicate; and Project, which specifies name and address.

3. The Work

The Work details the scope of a project: it’s just a clear description of what is going to be done. Karalynn shows you how to use the simplest language possible to avoid misunderstandings.

4. Schedule

Schedule disputes are among the most common Karalynn sees in her practice. Learn to set a time frame and two scheduling formats: short term and long term.

5. Excusable Delays

Learn about Excusable Delays, or Force Majeure, which provides additional time to finish a project when surprises or unforeseen issues arise.

6. Changes In Work

Establish a clear order of operations between contractor and client so everyone can know what to do if pricing or scheduling needs to change.

7. Payments

Karalynn shares various aspects of Payments, from payment schedules to retainer requirements. This section details who’s paying whom, and when. Plus: what to include in an invoice.

8. Insurance & Indemnity

Construction is a risky business, making good insurance essential. Learn how Insurance & Indemnity details a project’s coverage so you can properly protect yourself and your business.

9. Independent Contractor

Karalynn helps you tell the difference between employees and independent contractors, and shares why every contract should cover employee rights.

10. Default

Default means that one party didn’t do what they said they were going to do. Learn how contracts tell you what to do in the event of a default, like giving notice before termination.

11. Termination

All contracts include a list of circumstances that make it okay for one party to end the contract. Learn how to set termination terms in a contract, from designating who receives materials when someone is fired to setting trespassing rules.

12. Dispute Resolution

Karalynn shares several dispute resolution methods you can put in a contract, from mediation and arbitration to courtroom litigation.

13. Quality of Work & Warranty

Quality of Work & Warranty sets expectations for the standard of quality. Karalynn explains how warranty timelines work.

14. Will Not Hire

This small but critical section in a contract protects business owners from competitors looking to poach their employees.

15. Attorney Fees

Karalynn explains how contracts account for attorney fees and stresses the importance of avoiding litigation.

16. Complete Agreement

The Complete Agreement section, which all parties sign off on, prevents them from making agreements outside the contract. Karalynn shares why contracts don’t need to be complicated and that equipping yourself with contractual knowledge is helpful with ensuring you have a long-term, successful business.