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What are the elements of a good construction contract?

Avoiding construction contract disputes often begins with crafting a solid construction contract. This is especially important if you are entering into a construction contract to have a house built in North Carolina. You want everything to go as planned and to get the house you envision at the end of the project.

Networx explains you need to have some specific elements in a construction contract to ensure it is complete and clear. It should always explain what work is being done. You want a complete description and explanation of what work the builder is going to do. This includes explaining expectations, such as that the home will be built to code and will be built using quality products and following industry standard procedures. This part of the contract should be very specific. Insurance coverage and licensing details should also be included.

Your contract also should include a guarantee for the work and materials. It is also important there is something in the contract about penalties for not finishing the work according to the agreed upon timeline. If you do not want to include penalties, you should at least have the start and end dates listed in the contract, along with details on possible delays and how those will be handled.

The contract also needs a section outlining costs, which includes the payment schedule and details on material costs. It should also contain something about what happens when extra costs come up or costs are more than estimated. Any waivers or special clauses need to be included and carefully worded.

You and the contractor should read through the contract, discussing anything you do not understand or agree to. Once the final contract is agreed upon, both of you should sign it. This information is only intended to educate and should not be interpreted as legal advice.

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