Contracts

andrew07

What are the essentials to have in your contract (I am doing remodeling mostly, have a possible job to gut and turn an office into living quarters) I already have a contract form that I use but would like to see what you all think is necessary to put into your contracts.

I want to make sure that I don't have something come up that I missed and get burned just because it was not stated in my contract, I would like to have a contract that is iron clad and covers all the bases as much as possible, thanks for the info, alaw11@msn.com

Here is my contract form:


Clients name\Company name:
Address:
Phone number:
Contractor’s name:
Phone number:

Client desires to contract with Contractor to perform certain work on property located at : __________________________________________________ ________________________________________

1. Work to Be Done
__________________________________________________ __________________________________________________ __________________________________________________ __________________________________________________ __________________________________________________ ___________
2. Payment
In exchange for the work specified in Clause 1, Client agrees to pay Contractor as follows [choose one and check appropriate boxes]:
[ ] $_________ payable by: Before work begins
$_________ payable when the following occurs: $_________ payable when the following occurs:
____% payable when the following occurs: ______________________________


[ ] $____________ per hour for each hour of work performed, up to a maximum of $____________, payable at the following times and in the following manner: __________________________________________________ _________.
Payments to be made as listed above. Payments not received by invoice due date shall be considered past due. Past due accounts will be charged an interest charge at the rate of 1.5% per month until the balance is paid in full. No release of lien shall be signed unless all payments are paid in full.
3. Time
The work specified in Clause 1 shall [check the boxes and provide dates]:
[ ] begin on
[ ] be completed on
Estimated schedule
4. Licensing and Registration Requirements
Contractor shall comply with all state and local licensing and registration requirements for type of activity involved in the specified work
5. Permits and Approvals
[check all appropriate boxes]:
[ ] Contractor [ ] Client shall pay for all state and local permits necessary for performing the specified work.
Contractor will also be responsible for all removal and cleanup of materials
6. Injury to Contractor
Contractor will carry his or her own insurance. If Contractor is injured in the course of performing the specified work, Client shall be exempt from liability for those injuries to the fullest extent allowed by law.
7. Warranties
The contractor will complete all work in a substantial and workmanlike manner according to standard practices in the contractor’s trade, and the work shall conform to all applicable building codes or other codes and regulations. Contractor warrants that the final product of the work will be fit for the normal purposes for which it was intended. Contractor will warrant installation for a period of 1 Years (does not include misuse, abuse or weather damage or other similar acts) (materials have their own specific warranty from the manufacturer)

8. Additional Terms
Client \\Authorized Agent and Contractor additionally agree that: __________________________________________________ _______________________.
All agreements between Client and Contractor related to the specified work are incorporated in this contract. Any modification to the contract shall be in writing.

Client \Business Owner\Authorized Company Signature: _________________________________________
Date: ________________

Contractor’s signature: __________________________________________
Date: _______________






[ ] Contractor [ ] Client shall be responsible for determining which permits are necessary and for obtaining those permits.
[ ] Contractor [ ] Client shall pay for all state and local permits necessary for performing the specified work.
[ ] Contractor [ ] Client shall be responsible for obtaining approval from the local homeowner's association, if required.

Floordude

The way to avoid getting screwed is, in the section "work to be done" be very, very, very specific on what is and is not going to be done for this contract. The more specific you are, the less communication gaps during the job, there will be. The whole job goes smoother, the more specific you are.

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send_it_all

Contracts are difficult to enforce if there is not a start date and a completion date, so that, a detailed scope of work, exclusions, and a price.

wizendwizard

Andrew,Mine isn't much different than that. I did find something in yours i want to add to mine if you are agreeable.
(does not include misuse, abuse or weather damage or other similar acts)
Thanks in advance!!

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Ed the Roofer

So any collections costs do not have to come out of your pocket, add an appropriate attorneys fee and collection cost clause and the jurisdiction for any legal filings to be made at. That last one will save you tons if your attorney has to travel to a far away county, alone.

Ed

Celtic

It would help if we knew what State the OP was in

Some states require specific language to be used in a contract, minimum font size, etc.

NJ has these (among other requirements):

http://www.nj.gov/oag/ca/contractors/statsregs.pdf

__________________

Ed the Roofer

That 3-dayer notice is a Federal law, which sometimes is different than the States 3-Day Right To Rescind versions.

Ed

andrew07

No problem I just got mine off of a cd from the library and tweaked it,

I completely agree with Floordude, its all about the communication and expectations.

Ed the Roofer: Something like this? All attorney fees, court related fees, collections fees to be paid by... (thats where I got stuck)...defendant, client...

Celtic: I am in Joliet IL, not sure what OP means. Thanks

rbsremodeling

Andrew Before I joined this forum OP meant "Original Playa"

But on this forum it means "original poster"

__________________

Celtic

The OP formerly known as OP

__________________

Ed the Roofer

OP means "Original Poster".

Here are a few that I use:

Article 8) Customer Satisfaction – Presentation of the final walk through inspection report for customer satisfaction or the final invoice is notice to the Owner/Customer that the Company considers the project complete. Upon notice, the Owner is responsible to immediately make the final inspection and approve or disapprove the work by filling out the inspection report; or notify the Company in writing of any work considered incomplete or unsatisfactory. If no notice is received within one week, the project is considered completed and accepted by the Owner.
Article 9) Payments – Payments shall be made as provided in the agreement. The making and acceptance of the final payment shall constitute waiver of all claims by the Owner. Payment is due upon substantial completion of the work. If certain items of specified contractual work are incomplete, the cost of these items up to 5% of the original base contract amount, or a mutually agreed upon sum, may be withheld from the substantial completion payment at the Owners option until such items are complete or until the final walk through inspection has been approved. The work will be deemed substantially complete when the Contractor has completed all work called for in the contract documents and the work is ready to be used and occupied by the Owner, even though minor items may remain to be installed, finished, or corrected, provided such minor items do not have and appreciable effect on the Owner to utilize the work for its intended purpose.
Article 10) Judgment – The Owner hereby irrevocably constitutes any attorney of any court of record in this state, attorney for owner in owner’s name, on default by owner of any of the covenants herein, and upon complaint made by contractor, his agent or assigns, and filed in any such court to enter owner’s appearance in any such court of record, waive process and service thereof, and confess judgment, for any amounts which may be due to contractor or the contractor’s assignees, by the terms of this contract with costs and a reasonable sum for attorney’s fees, and to waive all errors and all right of appeal from said judgment, and to consent in writing that a writ of execution may be issued immediately.
Article 11) Attorney’s Fees – In the event we are forced to take legal action in order to collect the sums due, including wood replacement, changes in work authorized or required or necessitated to properly complete the job, then the Contractor will be entitled to all reasonable attorneys’ fees and other collection costs plus court costs. All legal action shall be instituted and interpreted by the Judiciary of Kane County, Illinois.

ChrWright

Lead base paint disclaimer, Radon disclaimer, Mold disclaimer...

Process/notice--what happens if problems are found in pre existing improvements

Make your draw schedule dependent on "significant completion" of project milestones--never use 1/2 done, 25% done, etc etc. or anything that's subjective.

"Contractor may request additional draws if there are delays in the delivery of Owner provided appliances, fixtures or materials--or if there are other delays resulting from causes beyond the control of Contractor. These draws are to be based on the portion of project completed towards the next scheduled draw. "

"Not responsible for delays....acts of god...material shortages, shortages of labor, etc etc."

Consider an arbitration clause...

Here's a big one:

"Owner agrees that the direction and supervision of the working forces, including subcontractors, rests exclusively with the Contractor or his duly authorized agent, and Owner agrees not to issue any instructions or to otherwise interfere with same. Owner further agrees not to negotiate for additional work with Contractor’s subcontractors or employees, nor to engage another contractor or subcontractor, except with Contractor’s consent, and in such manner as will not interfere with Contractor’s completion of the work under this contract. "


You've been given a lot of good stuff by others in this thread--but you really need an attorney. No one but an attorney can give you legal advice, by law. Besides, there may be format/content requirements specific to your area/state. You don't want the judge throwing out your whole agreement because your cut & paste contract doesn't conform to the letter of the law.

Above and beyond the "legalese," you can prevent 90% of homeowner-contractor problems by putting as much detail as you can into your agreement: scope of work, materials to be used, quantities & lineal footages, references to dated design drawings/floor plans, processes for change orders, timelines, etc. I insert detailed scopes of work into each contract so that BOTH sides are clear about what's included, and sometimes more importantly--what's not.

__________________

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www.WrightWorks.net - Facebook - Twitter - Carmel Remodeling
Indianapolis Kitchen Remodeling Contractor - You Can Get There From Here

SelfContract

All are good advices. Consult your local construction law and experienced attorneys specific to your state and trade practice. Do not use contract format and/or form of one state and applied to another state, or you will be sorry later.

Ed the Roofer

One other item is key.

What if a judge rules that one clause is invalid?

All clauses then get thrown out, so you need a severability clause.

P.S. The best clauses in the world will not help if you do not perform as contracted for and to the expectations that you built up with your customer.

Ed

Article 14) Severability – If any provision of this agreement is found to be unenforceable, then such provision will be modified to reflect the parties’ intention. All remaining provisions of this agreement shall remain in full force and effect.

Grumpy

Amen, I write my scope of work as if it were a work order for the installers. Infact all I have to do is copy and paste the contract scope of work to the work order.

I was shocked when I saw only 3 lines for work to be done. If I am going to go to a customers house and do a roof, siding, gutters and windows, each scope of work is approximately 1 page each so my contract would be about 4 pages for an exterior make-over.


Draft your contract and send it to a lawyer.

andrew07

Thanks all, great advise, just what I was expecting. I will eventually have a lawyer look it over after I tweak it some more, thanks again.