The terms of a construction contract determine what services a business provides and what standard a client intends to impose on the finished product. Those operating businesses in the construction sector need to ensure that they clarify client expectations and include appropriate terms in contracts to protect the organization.
Construction contracts need to include special language to protect the company from unforeseeable complications. What common issues require special consideration in a construction contract?
The possibility of delay
Clients often look at a company’s portfolio of finished projects, the proposed budget and the proposed timeline for the project when deciding whom to hire. Companies that can complete the work more quickly may receive preferential consideration over those with a backlog of projects.
Factors ranging from worker illness to inclement weather could result in delayed project completion. Contracts often need to include flexible terms for adjusting the project timeline in the event of unforeseen delays.
Standards for material substitutions
Frequently, clients hiring for construction projects have specific standards for the final finished product, including expectations regarding the materials to use by the construction firm. When clients request a specific look or material, deviating from that expectation can trigger conflict.
It may be necessary to include rules about making substitutions in cases where supply chain disruptions or sudden shifts in the price of raw materials, possibly due to environmental or political changes, force a company to reevaluate its budget for a project or consider alternative materials.
Recognizing that factors outside of leadership’s control could delay project completion and impact client satisfaction can help during the contract negotiation stage of a large construction project. Thorough and customized contracts are important for the protection of construction businesses.
