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A strong contract can address problems before they begin

On Behalf of | Dec 30, 2021 | Civil Litigation

A construction project can be a lucrative endeavor for both real estate developers and contractors in the Shenandoah Valley. Construction projects are usually based on construction contracts. Having a good contract can help avoid problems down the road.

What should all construction contracts contain?

There are some elements to a contract that all construction contracts should contain in order to be strong and enforceable. Contracts should be in writing rather than just an oral promise. The contract should clearly include and describe the services being offered to avoid confusion. Both parties to the contract must clearly understand the terms of the agreement, including financial terms. Finally, a strong construction contract should include policies for cancelling or terminating the agreement.

Three variations on construction contracts

While all construction contracts should contain the above elements, there are ways construction contracts can vary in practice from one another. Some construction contracts are express contracts. This means the purpose and scope of the agreement is defined in the contract and the terms of the contract are clearly understood by both parties.

Some construction contracts are executed. This means the contract provides a warranty period. In an executed contract, services have been rendered but one party is protected if elements of the project are defective or are installed incorrectly.

Finally, some construction contracts are conditional. This means that a service was not provided when the contract was executed. Instead, the contract contains a future date in which the services will be rendered. This is generally based on certain conditions being met.

Strong contracts provide strong protections

Sometimes disagreements occur during the course of a construction project. If the parties have a strong construction contract these disagreements can potentially be quickly resolved without developing into further problems that result in civil litigation. A strong contract provides real estate developers and contractors with strong protections during the course of the construction project.