3 Questions Every Contractor Should Consider Before They Sign a Contract
We’ve said it a thousand times before and we will say it again: the construction contract is king. At Cotney Attorneys & Consultants, our Memphis contractor lawyers provide a variety of helpful services to construction professionals in relation to their contracts. From the negotiation process to the final product, we help every step of the way by drafting construction contracts that mitigate risks and help grow your business.
Arguably, the most important reason why you need an iron-clad contract is to protect your business from any type of costly dispute. In this article, a Memphis contractor lawyer will discuss three things every contractor should consider before they sign a contract. If you don’t ask yourself these questions, you may find yourself in a dispute. Remember, at Cotney Attorneys & Consultants, we can draft, review, and revise all of your contracts at a fixed monthly rate when you sign up for a subscription plan.
1) Is the Contract Crystal Clear?
We often stress the importance of having one of our construction attorneys draft your contract to ensure that the language in it is “clear.” But what exactly does this mean? Each provision needs to be clearly articulated not only by you but also by the other party signing the document. This allows each party putting pen to paper to firmly understand their obligations under the agreement, including their responsibilities in regard to the scope of work and their rights within the deal.
2) Are the Risks Fairly Managed?
Entering into any contract comes with certain risks. These risks need to be assigned to each responsible party in a way that the party can comprehend. Moreover, the risks featured in the contract should be allocated to the professional that can manage these risks.
Some common examples of risk management clauses include: an indemnification clause (compensates the party that is exposed to damages), limitation of liability clause (caps the amount of payable damages by one party), or waiver of subrogation (waives right for insurer to pursue damages from the other party). Before you sign any contract, you should have an experienced construction attorney review your contract and assess the contract risk management aspects.
3) Does the Contract Consider Changes to the Project?
There can be a lot of manipulation on any construction project. Naturally, these reconfigurations need to be featured in your contract. For example, everything within the timeline of the project can change. So can the scope of work, the materials used, or even the entire value of the contract. All of these issues should be featured in the initial contract or else it can lead to disputes down the road.
If you would like to speak with a Memphis contractor lawyer, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.