Construction contracts can take on many shapes and sizes and there are several important provisions that you should review. But, the most important, in my mind, is the scope of work to be provided.
Preventing Costly Overruns
Ideally, the scope of work will detail, and limit, the work that is to be provided for the money that the owner is obligated to pay. We recommend that the scope of work refer to the most recent and up to date plans and specifications at the time the contract is signed.
The difficulties arise when the scope of work is less detailed, and the contract says that the contractor will do all work described and that which can be inferred from the drawings. After the finger pointing starts, the parties may seek clarification on what was expected and discuss change orders. Sometimes, as you well know, these discussions do not go well and can result in costly overruns.
Clarifying the Scope of Work
When you review your next contract, I recommend that you:
- Carefully review the scope of work and all documents identified as ‘contract’ documents. This likely includes the Prime Contract.
- Ask for clarification if the scope is not clear.
- Make sure you have the most updated version of the plans and that they are incorporated into the contract.
- Understand the time lines associated with the change order procedure—just in case.
The scope of work is an important, if not the most important, part of a construction contract. It can make or break a project and it’s always better to know exactly what you are getting into before the contract is signed.
If you have questions about your construction contract, we recommend you contact an experienced construction attorney.