What information is important to include in a construction contract?


Quick Answer

Among the top items parties should agree upon in a construction contract are the scope of the work, indemnification, warranties and bonds, change order provisions and responsibility for delays, according to the American Bar Association. All these items are subject to negotiation between the parties involved, and the obligations should be expressed clearly.

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Full Answer

Critical information about the scope of the work agreed to in the contact needs to be specific and not taken for granted, warns the American Bar Association. Expectations about the quality of the work delivered, the adherence to original design concepts and flexibility for adjustments, and the general scope of duties should be clearly defined to prevent future conflicts. Indemnification addresses which party should be held responsible in the event of certain types of third-party claims. Such terms can be negotiated according to specific circumstances and sometimes made easier by agreeing to mutual indemnification.

Warranties and bonds provisions guarantee the delivery of a certain type of work and protect the contractor from claims against such work under certain conditions, reports the American Bar Association. Change order provisions specify the framework and process required for making any major changes during a project. Similarly, if any delays should occur in the project, the contract should detail the action taken and responsibility borne for specific situations.

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