Delev & Associates, LLC

What should I include in a construction contract?

If you are in need of developing a contract for an upcoming construction project in Ohio, it will be important for you to understand how to approach this process. A contract is a legally binding agreement and every word in the contract can make a big difference. In fact,, recommends that great care be taken to ensure as much clarity as possible around the terms of a contract. If anything is left open to interpretation, that may make enforcing a contract as one party views it more difficult should a dispute arise.

One of the primary things you will want to include in your contract are terms of payment. If none are provided, it may be assumed that no payment is due until work is completed. But, ambiguity could arise here as contractors and owners may have different definitions of "completed". For this reason, specifying a payment plan is wise. It may include multiple steps in the process at which payment is due. Milestones for each may be clearly identified.

If subcontractors are to be used, payment from a customer may be required when a contractor needs to pay a subcontractor or before the work begins and payment to the subcontractor is due. These terms are stipulated by a "pay when paid" or a "pay if paid" clause, respectively.

This information is not intended to provide legal advice but is instead meant to give Ohio contractors and residents an overview of some things to keep in mind when drafting construction contacts between contractors and property owners.

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