It’s a pity the Lone Ranger and Tonto were never asked to write a contract. They used simple language, could hear trouble coming down the tracks, stopped foul play, stuck up for the little guy and arrested cowboys all over the land!
It is a sad fact that many people simply use verbal agreements with contractors to progress works quickly or to avoid paying fees to professionals.
When problems arise, the cost and effort of resorting to common law far outweighs the cost and effort of having a formal contract. Resolution to disputes is quicker and easier when terms and conditions are set out and have been agreed upon for both parties ahead of time.
It doesn’t matter if your project is minor or that you know and trust your builder. As a homeowner, you may only commission work from a builder once or twice in your lifetime. That means you are inexperienced and vulnerable. You need to have your best interests protected; you need professional advice.
The purpose of a contract is to set out clearly what is to be done, who is going to do it, how they are going to be paid and any conditions that limit or qualify the work or its payment.
It is an agreement between the parties, whether that is your builder, your project manager, your designer, or any professional consultant.
A remodeling project for a homeowner may contain many contracts, and the owner should have a contract with all those employed by him. The builder will have contracts with his sub-contractors, the plumber, the electrician etc.
A contract can be in a standard form. For example, the JCT Minor Works Building Contract, which is commonly used for smaller, basic construction projects where the work is generally of a simple nature. One advantage of this form is that the clauses are known in the industry.
In many cases, a contract will require some special, project-specific clauses. This can be devised and tailored to your needs by your project manager or other qualified professional consultant.
A simple letter, preferably signed by both parties, setting out the component parts of the agreement is also a contract. Make sure that you cover all the important issues.
A contract is a shield not a sword. It’s your protection, the guarantee of safe passage through unfriendly territory. When you have the right builder at the right price, enter into a contract and seal the deal.
Managing a successful project