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3 things any construction manager should look for in a contract

Nobody likes reading a contract. It’s about as captivating as watching paint dry. However, it’s essential for any construction manager to read the fine print of a contract and understand the terms they’re agreeing to at the project onset. Failing to do so could delay their payment upon project completion.

Today we provide three key things to look for in a construction project contract:

How are change orders handled?

Some contracts require the contractor to notify the owner of change orders within a certain amount of time during the course of the project. However, other owners require all change orders to be negotiated at the end of a project. It’s your responsibility to ensure that all change orders adhere to the conditions stated in the contract.

Are there any conditions that aren’t my responsibility?

Before beginning a new project, you should thoroughly review each aspect of the contract to ensure that your payment isn’t contingent upon other factors over which you have no control. Let’s say, for example, that the owner has hired a secondary contractor to complete one aspect of the project. If the contract stipulates that final payment will only be submitted once all permits are closed out, then your payment could be delayed if this separate contractor fails to hold up their end of the bargain.

When is the project over?

You need to be clear on what criteria must be contractually met for the project to be considered complete. Some owners consider substantial completion to be the point of project close-out. However, other owners may add their own stipulations to the contract—such as requiring all permits to be closed out or every piece of contractually obligated work to be finished—before they will submit final payment.

Construction contracts can be complicated, but taking the time to fully understand what you’re signing can save you a lot of stress and aggravation down the road. Talking to an experienced construction law attorney can be a great asset in this process.

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