What Do Basic Construction Contracts Entail?
Basic construction contracts or agreements are documents that specify a commencement and completion date for any given construction project. The contract is necessary to be drawn up and agreed on by all parties involved in the process of the construction project.
Generally, the contract agreement gets executed between the project’s owner and supplier/ contractor which is providing the specific requested services. It also generally contains several clauses, which stipulates the scope of the work that is required to be done, the terms and conditions involved, as well as all of the fine detail of what the property owner is has provided.
The Importance of a Contract Agreement
A contract agreement for every individual construction project is crucial, as this one comprehensive document will protect the contractor or construction firm that takes on a new project.
Contract agreements will define the scope of work of the project at hand, ensuring that both the contractor and homeowner are aware of the work that needs to be done and comes to an agreement on it. Contract agreements also include payment terms and agreements, the work schedule of and how long it will take to complete a project.
Necessary Sections of the Contract Agreement
First and foremost, contract agreements should be in writing, it should have a description of the service or product offered, it should be clear and make sense between all parties involved, the financial terms should be covered and clear, it should include a termination or cancellation policy, and stipulate the services that need to be contracted clearly.
Different Types of Contract Agreements
There are various types of contract agreements that all include modifications depending on the work in the contract being executed.
Different types include express, conditional and executed.
1. Express Contract Agreements – This agreement defines the purpose and/ scope of the work that needs to be done. It also stipulates the terms of the agreement.
2. Conditional Contract Agreements – An agreement that gets used when services cannot be provided when the contract was signed. It thus stipulates a future date as per when services will commence and conditions will be met.
3. Executed Contract Agreements – This type of agreement provides a warranty period, in the case that something goes wrong. Under this specific agreement, services have already been rendered, but the contract ensures that one party is protected, should the other party’s performance fail to provide the necessary warranty for any work that has been done wrong.
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