In the construction business (or maybe any business), good customer service is all about establishing credibility with your customers. To do that, you need to gain their trust. If you really want to build trust with your customers — and protect your business from legal issues at the same time — start with a good contract. What are some of the elements of a good construction contract?
While your specific needs may vary by the job, your contract should at least include the following:
1. Identifying information
Make sure that your legal business name is on your contract, along with your contact information and license. Make sure that you put the property owner’s name on the contract as well.
2. Project specifications
Include a detailed explanation of the work you will perform for the owner — whether you will do the work yourself or have a subcontractor complete parts of it. If need be, reference any plans or layouts that you used to further develop the planned work.
3. Payment expectations
Document what you expect the owner to pay. Include a schedule that explains exactly when he or she needs to give you each payment. Since you’ll likely take the payment in stages as the work is completed, make sure that your client understands how the process works. Homeowners who have never used a contractor’s services may be wholly unaware of what’s customary.
4. Change orders
Given that this is an area with a huge potential for trouble, you absolutely need a section that addresses how changes will be ordered and what effect those changes will have on price and payment. Do not leave anything unstated or ambiguous in nature.
5. Termination clauses
Make sure your contract addresses how and when your client can fire you if he or she is unhappy — and how you can do the same if the homeowner turns out to be too hard to handle. Include a notice period, payment terms, the responsibility for legal fees and anything else relevant.
6. Insurance
Including information in your contract regarding your insurance is sure to reassure nervous clients who have heard horror stories about uninsured contractors. Ultimately, a good contract is one that gives both parties a measure of security and makes everyone’s obligations clear. If you have one, you definitely won’t regret it if you run into trouble down the line.
Source: FineHomebuilding, “10 Provisions for Construction Contracts,” Shawn Van Dyke, accessed May 25, 2018