The construction contract is an important document that contains the details about a contract for construction requirements. There are several elements that must spell out in a construction contract that should deal with the salient points and help make a good agreement between the involved parties. Determined by the nature of a contract some elements might be applicable while some might need adding up. Nevertheless, some of the salient points which must be integrated into the construction contract are identities of the involved parties, recitals, obligations, representations, payment terms, price, terms of the contract and liability, warranties and termination of contract.
The identity of the parties must contain the name, entity of each concerned party and addresses. The recitals must include things like the purpose for entering into the contract, background of the agreement, and also key assumptions of the agreement. The obligations of the each party must integrate what each party must do , when the construction must be finished and when something must be delivered whose obligation will it be to and at whose cost . The terms and conditions of contract must include things like describing either the contract is a one-off one or will it end for certain fixed time and how will the terms be extended or renewed.
The price must be spelled out on what is to be paid for the services or products, whether the overall cost contingent on fixing it through the formula or by project fee. The payment terms must explain when is the settlement due, installment payments to be done, interest to be incurred, and any kind of penalty levied for overdue payments. The representations and also warranties must stipulate what warranties and representations are to be made by the concerned parties, specific warranties disclaimed, and also the exact amount of time that the warranties are valid.
The construction contract administration must be done carefully and that is why the contractor should consult consistently with specialized attorney . One more thing to keep in mind that the construction contract must be made only after enough study and thorough discussions.