What are the Components of a Clear Contract

Krablin-tea-roomWhen it comes to building or remodeling a home, it’s important to be aware of everything that goes into the process in order to prevent common mishaps and conflicts during your construction project. The more detailed and specific you can be upfront, the less room there will be for errors due to misunderstandings and miscommunications. It’s important to clearly understand each part of the contract.

1. The contract is meant to prevent problems from arising by giving a roadmap and timeline of the details and expectations of the builder and client. This helps prevent any unexpected delays. Responsibilities, information about the scope of the project, payment schedules, and conflict resolution strategies are all included in the contract. A clear contract is a guideline for your endeavor.

2. The Project Description clearly identifies the elements of the finished project, including specific details about the plans. The more detailed and clear the description of the work to be done, the better the outcome will be.

3. The plans are the visual images of your completed project as expected. These could include a variety of things such as floor plans, elevation drawings, plumbing, electrical and cabinet details. All plans should be verified and signed by both parties involved in the home construction process.

4. The specifications, or “specs” are the written descriptions of what tasks will be completed and generally, in what order. The specs also identify the items that will be installed in the home. This includes the make, brand, color, manufacturer, and any other detail about the components that go into a home. The price of the project is based on the specs, so the more specific you can be, the more accurate the estimate will be.

5. The construction documents are made up of the contract, plans, and specifications. These documents allow the contractor to get accurate bids, as well as obtain needed permits.

6. Discretionary Funds include allowances and change orders. Allowances allocate budgets to cover tasks that haven’t been chosen yet, such as lighting or flooring. Change orders are any changes to the original scope of work requested by the homeowner. The contract should clearly indicate what changes can be made, the estimated cost of possible changes, and who can approve each change order. It’s extremely helpful to record each change order to avoid any surprises.

Clear and concise contracts that identify specifically who, what, and how will ensure that you get exactly what you expected without any of the common issues that can arise during this process. Building or remodeling a home could be a difficult process, but establishing a detailed contract can make the process significantly smoother.