How to Write a Building Contract

A detailed contract is the best insurance against problems with all building-related work.

Building contracts are vital to any building project. Without a well-written building contract the possibility of misunderstandings and outright abuses of the builder-buyer relationship can occur. Writing a standard building contract is relatively easy, but it's recommended that you seek legal council to help with interpreting the legality and ensure the completeness of the documents.

Things You'll Need

• Building project
• Blueprints
• Drawings
• Proposals
• Attorney

Instructions

1. Consult contractors to obtain estimates for the building project. Make all contractors aware that proposals should include the entire cost of completion, a time frame for completion, and the expected payment terms. Also notify contractors that the winning proposal will be accepted upon signing of the building contract.

2. Consult an attorney to assist in writing the building contract and to act as a witness. Provide the attorney with the name, address, phone, fax, and email of all contractors and any other relevant contact information.

3. Include a description in the contract of the jobsite, the project's location, and information about the residential area around the project.

4. List the value of the building contract and financing terms. Include the contractors' payment schedule and any procedures for submitting draws.

5. List any insurance requirements that the builder and/or buyer must provide to cover unforeseen accidents or problems that may arise during and after the building plan's completion.

6. List the dates that the project begins and the anticipated date of completion. Define what is expected for completion of the building plan, along with definitions of excusable delays. Include information concerning penalties and fines for failure to comply with contract deadlines.

7. Include all drawings, sketches, and blueprints of the building project as well as detailed job specifications outlining all major materials to be used and any special installation procedures. Define the procedures for substitutions, change orders, and all exclusions.

8. Clearly state the rights of all parties to the contract concerning access rights to the project and permitting and inspection procedures.

9. Establish a plan for conflict resolution. This is a very important part of a building contract and includes an arbitration clause, the terms of settlement, and procedures for formal notification. Ensure that all warranty and service policies are listed, to deflect conflicts that may arise from warranty disputes.

10. Attach any documents required by state and local laws to the building contract. Have all signatories review and sign each page of the document, along with the witnesses to the signing. The attorney will hold the document and provide any copies to the necessary parties. The document is a complete legal contract enforceable by law.

Tips & Warnings

• Openly express the need for contractors to provide thorough information concerning their products' warranties, their payment expectations, completion dates, and other relevant information. Reputable contractors have ample experience with building contracts and know what information to provide.

• Always consult legal advice before signing legally binding contracts.

• Failure to seek legal advice may be detrimental to your rights and potentially expose you to unforeseen financial liabilities. Always retain legal representation for any major building project.