How to Write a Contractor Contract Agreement
No single component of a construction project is as important to its successful outcome than the contract agreement between owner and contractor. That contract should identify each party and their responsibilities, fully define the work to be done, and fix the amount and timing of payment. While contractors often attempt to write this document for an owner's signature, it is often incomplete. The recognized industry leader in owner/contractor agreement forms is the American Institute of Architects. (Documents can be purchased by non-members.) Legal expertise is required when entering into any contract. A contractor contract agreement prepared by legal experts of a reputable and unbiased organization provides the most economical expertise available.
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Instructions
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HOW TO WRITE A CONTRACTOR CONTRACT AGREEMENT
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Assemble complete project bid documents. Bid Documents will become exhibits to the contract for construction and should include:
• Request for contractor's information: the contractor's name, legal entity, contact information, license number, proof of insurance, banking reference and proof of compliance with requirements of the local building department.
• Scope of work. Fully and clearly describe the work to be done. Include the manufacturer and model number for every product selected. Include quality control data for each construction component.
• General requirements and conditions. In addition to the construction, contractor requirements may include obtaining building permits and inspections, conforming to applicable building codes, assembling product guarantees or limiting hours of work.
• Request for proposal--the contractor's proposed price and time-line for completing the work.
• Proposed contractor contract agreement. Choose this form with the advice of your attorney. Contracts vary with project size and payment method. A good contract, like those produced by the American Institute of Architects, will require all the items above. It will also describe remedies for a contractor's non-performance, owner's non-payment and unforeseen circumstances. -
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Ask the contractor for his written bid document proposal, with notations if he does not fully comply with requirements. The bid document should supply the owner with everything necessary to prepare the contract for construction.
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Negotiate proposal variances. Add agreed written amendments to the contract exhibits.
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Prepare contract details in the previously submitted contract format. This will generally mean "filling in the blanks". Attach enumerated bid documents as an exhibit to the contract. Review the completed document with an attorney prior to signature.
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Tips & Warnings
Prepared owner/contractor documents are available from the American Institute of Architects for large and small projects, as well as a variety of payment methods. Pick the right contract to match your project type.
Use your specific contract type as a checklist for preparing and requesting bid documents.
The purpose of a contract is to define deliverables, and to manage cost and risk. The value of a contract increases with the cost of the construction project. If you don't possess specific construction expertise, you should consider hiring an architect to prepare bid and construction documents.
