Part of the reason that construction work can take so long is due to higher management far more often than the quality of work being done on the ground. Construction work can also be delayed by long periods of time if all parties are not in line with agreements previously made. A huge portion of this comes down to construction contracts and how they are formed.
A well-written construction contract clearly states the work to be done, the price to be paid for the work done, and the terms and conditions of payment. The contract must also contain, in writing, the possible situations and risks that may arise between the parties. When the parties establish a list of risks that may arise, the contract is long and complicated but reduces the chances of disagreement between the parties and ambiguity or “gray areas” in the contract, assuming that the parties will take the time to read it. Of course, not reading a contract will not exempt the parties from its compliance nor can it be used as a defense, especially after a construction accident occurs.
Construction contracts are often formed through a bidding process. The owner posts a more formal RFQ (request-for-quote), and contractors who want to perform the described work respond with the price at which they are willing to perform the work. The contractor’s offer constitutes a mandatory offer, which, if accepted, will give rise to a legally enforceable contract. Acceptance of the offer is generally called a “prize” of the contract.
In the case of private construction contracts (as opposed to government contracts), the owner requesting the offers is generally free to accept or reject any offer, regardless of whether the offer is the lowest or the most efficient. However, in the case of public contracts, the solicitation process must follow strict rules set forth in federal, state, and local laws and regulations.
Construction contracts also consist of clauses that contemplate the terms of the agreement that generally establish the price and description of the materials that will be used in the performance of a job, in agreements that any conflict will be resolved through arbitration. Courts are reluctant to interpret terms that are not expressly part of the contract. However, they can resort to local custom and usage if the contract is ambiguous on an important issue that is disputed.
This article is intended to be helpful and informative, but legal matters can be complicated and stressful. A qualified attorney can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local real estate attorney to discuss your particular legal situation.