5 Concepts That Appear In Most Construction Contracts

Posted on: 10 December 2020


If you're preparing for a building project, it's wise to hire a construction lawyer to help you review the terms. Still, you'll benefit from understanding some of the top-level concepts that appear in most contracts. A construction attorney always keeps an eye out for whether the following 5 terms show up in a contract.


Especially with development projects, everyone must agree on just how much work is being done. The scope of the construction services should cover which lots the project is developing, how many units are involved, and who will be handling the work. Likewise, the scope should cover the expected timeframe of the contract while also allowing room for potential disruptions such as weather.

Third-Party Assignment

A single enterprise rarely does all of the work on a project. Normally, a company will subcontract work to third parties. However, a company can't do that without a third-party assignment clause. This allows the company to use its judgment in hiring people to deal with electrical, plumbing, roofing, heating, and similar work.

Remedies, Cures, and Notifications

As much as everyone wants everything to go perfectly, it's normal for projects to have some issues. What happens when something is problematic? For example, what is the solution if a series of units is off in at least one dimension by several feet?

The contract should outline how the parties notify each other of issues. Likewise, the deal should include terms for how long they have remedy problems and what the legal consequences are if the issues can't be fixed. It's also a good idea to include information about the license, insurance, and bond requirements in this section.

Assignment of Liability

Providing clarity regarding what happens if, for example, a visitor to the site is injured is important. It's possible to assign liability for such incidents to the construction company. However, you should expect any party accepting assignment of liability to demand sufficient compensation to make up for additional insurance premiums.

Incorporation of Specifications

Although the specifications for a job don't have to appear directly in the contract, a construction lawyer will incorporate them. This is usually done by adding supplemental materials or attachments to the contract. Parties to the project will usually initial minor items to acknowledge them, although some materials might require full signatures. The critical thing is to ensure you can draw a direct line between the agreed-upon specifications and the final results.