Building or renovating your dream home marks an exciting milestone in your life. But before you sign a construction contract, you need to watch out for potential issues. Knowing the warning signs of a problematic contract can save you from costly disputes and endless headaches down the road.
Vague descriptions of the work
Your contract should spell out every detail of the construction project. Watch for general statements instead of specific descriptions about materials, timeline and expected outcomes. A solid contract lists exact measurements, material brands and clear completion dates for each construction phase.
Pressure tactics to sign immediately
Some contractors use “limited-time offers” or “special discounts” to rush you into signing. A legitimate contractor gives you time to review the contract thoroughly. If they’re pressuring you to sign quickly, that’s usually a sign there are hidden issues or unfair terms hidden in the agreement.
Missing change order procedures
Construction projects often need adjustments along the way. The change order clause in your contract should ideally include:
- Clear steps for requesting changes
- How cost adjustments get calculated
- Timeline impacts of changes
- Required approvals from both parties
A missing change order process can open your agreement to disputes about extra costs.
Unclear communication about project details
Consider it a red flag when contractors dodge questions or provide confusing answers about the project. Professional contractors explain complex terms in simple language and address your concerns directly. Clear communication before signing predicts how they’ll handle issues during construction.
Incomplete payment terms
Payment schedules should match construction milestones. The contract must specify exact payment amounts, due dates and the type of work done in each phase. Avoid contracts with large upfront payments or unclear payment schedules, which could leave you vulnerable.
Review your contract to protect the construction project
Your construction contract forms the foundation of your project’s success. Take time to review every detail and ask questions about unclear terms.
Consider having a construction law attorney review the contract before signing. An attorney can help ensure that no clause puts you at a disadvantage and help you draft a contract that protects the interests of both parties.