Law Office of Bryan R. Snyder, APC
Aggressively Protecting Your Rights And Interests
Call Today 619-752-1102 | Toll Free 800-611-2581
Areas & Topics

Don't let the contingencies hang up your construction project

If you are a contractor, one risk management tool to include in your contract with homeowners is the construction contingency clause. This is a percentage of the contract value that is reserved for unanticipated changes in your work's breadth and scope.

Construction contingencies can be added either to the original estimate or included with the client's budget. While responsible contractors always try to include all possible expenses in their bids, it's impossible to factor in every potential extra expense on each job. That's what these safety nets are for.

Sometimes the client changes horses in the middle of the stream on a construction project. It can be ridiculously expensive to make these late changes, but when the goal is to please the homeowner, a wise contractor does all that is possible to make it happen. Construction contingencies can really save a project in these instances.

An owner-budgeted contingency may stipulate that all applications be approved by the homeowner and that all unspent contingency funds be appropriately credited at the project's end. Alternatively, the homeowner may use unspent contingency funds to mitigate the expense of change orders for additional labor costs or alterations.

It is vital to the success of a project that both the contractor and the homeowner have a clear understanding of what the construction contingencies cover and do not cover regarding the project. Any time there is a communication breakdown between the parties, there is a chance that problems could escalate to the point of litigation.

If you are a San Diego contractor who is facing a lawsuit surrounding work that was done for a homeowner, you should get all of your ducks in line and seek competent legal representation.

Source: Succeed with Contractors, "Construction Contingency May Be a Point of Contention When Building," accessed Nov. 10, 2017

No Comments

Leave a comment
Comment Information

Law Office of Bryan R. Snyder, APC
1245 Island Avenue
San Diego, CA 92101

Toll Free: 800-611-2581
Phone: 619-752-1102
Phone: 619-398-8379
Fax: 619-398-8377
San Diego Law Office Map

Review Us