How to write a contract

A contract is a very important document. Whether you are a home owner,contractor,subcontractor or a small business owner, Writing a proper and concise contract is essential to your profitability and success

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• time,legal advice,a standard form,a printing co. to print forms, and some cases a notary.

1. When writing a contract there is a lot to consider. One important step is to be clear and accurate on everything you write and agree to. You should always spell out everything you will and will not do.

2. ANTICIPATE. You will need to anticipate any potential problems that may arise, Whether it be customer related, supplier related or even sometimes shipments of materials.

3. AGREEEMENTS. You need to make sure all parties involved agree fully to the contract. If an architect is involved you need to keep them informed and involved every step of the way as this will help you if the law ever needs to get involved

4. CHANGES. Almost every job has changes, Whether the owner makes them or the inspector rejects the work due to town codes. Another thing to consider is manufacture warranties. If you fail to follow manufacture' s directions you could void the warranty, So if a customer wants and insists on doing things their way you need to state in the contract the customer will be responsible for any changes. Always do the work according to manufactures specs, However some times situations where a customer wants it done one way and will not budge, Most times it is best to walk away but that opens up a whole new litigation process that you want to avoid so the best thing is to put it all in writing and have customer sign!!

5. COMPENSATION. You are entitled to getting paid for what you do. Make sure to state the payment structure in the contract. Most laws allow you to collect 1/3 upfront. Progressive payments are the best method. The laws also state the owner can only withhold 1/3 of the final payment until job is completed.

6. CHANGE ORDERS. Another important part of the contract is changes. Make sure home owner understands there are unforeseen problems that may occur that are beyond your control. Have customer sign and initial this very important part of the contract.

7. lEINS. Unfortunately some customers don't want to pay or over budgeted for the job, In such cases you will need to impose a lien on the property. Don't rush into this it should be a last resort, Always try to agree on a payment arrangement.

Tips & Warnings

• Try to always work with a set price and not time and material as the law does not allow you to collect for overhead
• make sure home owner signs a release at the end of the completed job. This release removes you from any future responsibilities as far a things not covered in the contract.
• never have a verbal agreement even if it is a friend
• always pay your creditors or they can place a lien on the homeowners property

[acole]

on 6/30/2008 This is informational and good to know. Thanks!

[akchrist]

on 6/28/2008 Wonderful advice!