The 7 Sins of Construction Contracts Part 1
You should never sign a construction contract before you understand every nuanced detail sprinkled throughout the terms and conditions. There’s simply too much at stake for a construction professional to blindly sign a contract. For all you know, a contract that promises riches and reputation could turn out to be the last contract you ever sign. In many cases, contractors clinging to aspirations of greatness watch their businesses crumble to the ground because they didn’t review their contracts in advance. All it takes is one poorly drafted contract to run a business aground, but this doesn’t have to be the case.
When it comes to the legal aspects of construction, tasks involving contracts and other legally binding documents are best left to the expertise of a Colorado Springs construction lawyer from Cotney Attorneys & Consultants Law. Contractors that attempt to handle contract-related tasks on their own often succumb to the seven sins of construction contracts, as we will discuss in this two-part series.
1. Poorly Articulated Deadlines
All contracts should include strict deadlines pertaining to the time frame of the project and when it is expected to be completed. Poorly articulated deadlines can lead to your business missing a deadline or wrapping up work well in advance of the expected completion date. The former can lead to a breach of contract, and the latter can cause your business to misappropriate resources and take on less projects than you can handle. Either way, your profits will be affected and you won’t be maximizing productivity. Having a strict deadline also helps you plan how you will approach the project and prevents you from taking on projects that tap out your bandwidth.
2. Unclear Pricing or Payment Method
You wouldn’t take on a project without a cemented understanding of what you’ll be earning, right? Unclear pricing is another contractual red flag that can be avoided with construction contract review in Colorado Springs. First, you must recognize the type of contract being offered. For example, a lump sum contract must be handled with diligence to maximize profits since the value of the contract is established upon signing. On the other hand, a cost-plus contract will help you manage expenses, but it may diminish your bottom line slightly if the owner is a tough negotiator. A Colorado Springs construction lawyer can help you make sense of these factors and give you a clearer picture of what you’ll earn for providing your services. We protect your bottom line by ensuring that the unexpected is accounted for and your best interests are represented.
3. No Payment Penalties
Matters of payment should concern “how much,” not “when.” In other words, when you receive payment, your only question should be: “Is the amount correct?” If you are receiving payment after the date stipulated in the contract, the entity that purchased your services should be penalized. Unfortunately, if you failed to engage an attorney for contract review in Colorado Springs, there’s a strong possibility that your contract contains a clause waiving penalties for late payments. This is one of the many reasons why all contracts should be reviewed by a Colorado Springs construction attorney.
To learn more about the seven sins of construction contracts, read part two.
If you would like to speak with a Colorado Springs construction attorney, 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.