Construction contracts include many documents such as contract drawings, specifications, prevailing conditions and the signed contractor. Unfortunately, these documents are long and people don’t go through them in detail. It is crucial for a contractor to look through the contract before it is signed to avoid future disputes, because once the contract is signed, you are bound to deliver the project within the contract period and under specific conditions. To avoid disputes, you should have a good ideas of important clauses within the contract.

Here are some of the important clauses in a construction contract you need to review before signing the contract.

• Scope of work. Read this carefully to make sure the scope is what you offered in your proposal.
• Contract amount. Make sure there are no mistakes in the sum. Track all the negotiations and bid amounts, so you will have an idea of the final agreed-upon sum. Make sure this sum is correct before signing. This amount should have the tax amount included.
• Project duration. Check for the projected completion date and start date. Also, check the expected site handing over date from the client.
• Payment terms. Analyze the payment terms. Know in how many days you are entitled to get the payment. You need to know these payment details, so you won’t run into cash flow problems.
• Variation clause. Variations can occur, so this clause is important to identify variations, instructions to variations, and the method of valuation of variations. If you don’t have this clause and an explanation, you can waste time and have to deal with many disputes.
• Liquidated damages. You should prepare on how to deliver your project on time without imposing liquidated damages. Check this figure and clause before signing.
• Dispute resolution. Challenges and disputes will likely occur on any project. This dispute clause can list dispute resolution methods other than seeking litigation.

Always check these clauses before signing any construction contract. Make sure you agree and understand everything within these clauses. Go through the entire contract thoroughly before signing. If you do not have time, ask someone in your staff or ask a consultant or legal professional to read it over.

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