So, now that you have your luxury property plan ready, it’s time to jot down the details on paper and finalize everything. This is where the general contractor agreement comes in. This contract isn’t only to serve as a reference, but it’s also to help protect your interests before the project begins. Additionally, it must contain important details of the project.
There are two types of general contractor agreement: standard and custom. So, which one is the best one for you?
Standard Contract Agreement
Standard contract agreements are necessary to protect yourself and your investments. Therefore, anything that goes beyond that may be considered a red flag. There are companies that offer custom contracts, and some may even be worth considering. However, when it comes to finding an agreement that is foolproof and will have your best interests, a standard contract agreement is the one for you.
To ensure you have a standard contract agreement, be familiar with major industry groups that produce such a contract. Here are some of them:
- American Institute of Architects (AIA)
- Associated General Contractors of America (AGC)
- Engineers Joint Contract Committee (EJCDC)
Agreements based on these industry groups’ standards are fair and flexible. Moreover, a standard contract is easy to understand, which is important for clients to understand the obligations of the contractor.
Keep in mind that this type of agreement will also thoroughly address unexpected issues that may come up during the project. It is adaptable, and you can apply it to any type of construction contract virtually.
Custom Contract Agreement
Be cautious with custom contract agreements. Why? There are cases when the contract may not be in your favor, compared to a standard agreement. So, if you find yourself with a contractor who insists on using a custom contract for the project, it’s a good idea to have a lawyer by your side who can help review the document before you sign it. This is to avoid any issues and ensure that what’s written on the document remains fair for you.
The bottom line is that a standard contract agreement is still the best agreement for any construction project. Although custom contracts work for some, it’s important to be extra cautious before signing and have legal assistance to work through the contract.
What a Construction Contract Must Have
Now that you know the difference between a standard and a custom construction agreement, it’s time you dive deeper and get to know the information it must contain, such as:
- Project timeline
- Scope of work
- Cost and payment terms
- Work schedule
- Stop-work and stop-payment clause
- Act of God clause
- Change order agreement
A construction contract will help you and the contractor be on the same page before moving forward with the construction project. Additionally, it helps protect you should there be any disputes, disagreements, or issues with payment over the course of the project.
Sign the Right Construction Agreement
By knowing about the construction contract agreement, you will be more confident in signing or not signing a document. You will have the assurance that you will get the best results out of the project, which will make your investment worthwhile. Avoid any problems as much as possible with construction projects by having the right construction agreement drawn up.
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