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Importance of a written agreement with a contractor

Importance of a written agreement with a contractor

Are you looking to build a house or you are simply carrying out renovations? Whatever the case you need to have a written contract. Sounds simple enough right. Yet so many homeowners commence works without a contract in place. Regardless of the eagerness to get works going at the earliest possible moment, insist on a contract. It is in the best interests of both parties to have a contract in writing. Firstly, there will be some assurance over the extent of work and cost. Secondly, the agreement will have a system for managing issues that emerge amid the project. Let us evaluate the importance of a written agreement with a contractor.

Define the scope of work

Before the contractor starts any work on the project you need to have a sit-down. In the first place, start by clearly defining exactly what you need to be done. Explain clearly right down to the most minute detail. The contractor can then explain the nature of works to be undertaken, the cost, as well as the timeframe. Issues not clearly identifiable can always be added to the agreement when they arise. However, you need to agree on how those issues will be decided.

Cost of contract

One of the most contentious issues with any project is the cost if the entire works. As such, every homeowner needs to know and the cost of the project beforehand. However, a detailed scope is necessary for the contractor to come up with a price for the job. It is therefore essential that you provide the contractor with as much attention to your requirements.

Payment terms

The terms of payment must be clearly laid out right from the onset. However, you need to insist that the cost of the contract is spread through the duration of the contract. You and the contractor must decide on a payment schedule. Moreover, ensure you specify at which stage various payments are due.

Timeframe

One of the most important items that must be stipulated in any contract is the contract period. Firstly, as the homeowner, you need to know how long the entire project will take. This will have a bearing on when you can move into the house or lease it out. Secondly, this enables the contractor to know when they will finish and schedule other jobs. The contract period or timeframe should capture both a start and a completion date. Furthermore, in some instances, the contract will make mention of imposed penalties should there be violations on the contract period.

Working hours

Defining working hours is extremely important. Particularly in cases of renovations and you are still living in the house. Health and safety issues must also be adequately addressed. Furthermore, you will need to specify issues surrounding the storage of materials and equipment.

Changes

It is inevitable that at some time one or both parties may need to make changes to the initial contract. Usually, this situation arises because you may want to make alterations to some component of the work. In some instances, the contractor may bring to the fore a different way of doing things. Whatever the circumstance both parties need to understand that this will have a bearing on the contract cost, as well as the contract period. Keeping this in mind the contract needs to have a procedure for reaching an agreement.

Unforeseen events

Unfortunately, unforeseen circumstances do arise more often than not. Regardless of their nature, they have to be adequately addressed and dealt with. A competent and experienced contractor will usually make provisions for these in their contract cost estimation. It is also important for any changes to be recorded through a change procedure form.

Insurance

Both you and the contractor need to have your respective insurance in order. In addition, you must make sure the insurance adequately and fully covers you. Remember that you are dealing with your home, which is an area of great magnitude.

Termination of contract

To easily and smoothly end a contract it needs to have a termination clause. Your contract should give the contractor the leeway to terminate the contract if you fail to pay them. In addition, it should also empower you to terminate in the event the contractor deviates from the contract terms and conditions. However, the inclusion of a suspension clause is key to addressing issues. Rather than terminate the contract it gives either party the allowance to suspend the contract until they get their affairs in order.

Completion

According to your contract, works must be finished by the completion date. However, a certain amount of time must be allocated to assess how everything is holding up. During this period the contractor can redo some work and carry out maintenance on issues that may not be up to scratch.

 

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Teddy Chibanguza

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