Benefits Of Getting Contracts For The Construction Industry

1163 WordsDec 18, 20155 Pages
Written contracts are useful tools for any business, and construction companies are no exception. In fact, contracts can be both practically useful and strategic in the construction industry. This newsletter will introduce some of the practical benefits of getting contracts for your projects and then discuss some key provisions of construction contracts. Understanding these provisions will help you to manage risk through careful scrutiny of contract terms and knowing when to call on counsel for assistance in negotiating and drafting contract provisions that fairly allocate risk among the parties. Taking the time to negotiate contracts will yield at least three distinct benefits. The first benefit, which may be obvious but still merits mention, is that well written contracts give both sides of the agreement useful guideposts to help navigate important aspects of the project. Among them, the time and manner of payment, project milestones, and which party bears the risk of various issues that cause increased costs or other unexpected eventualities. Absent clear written agreement before the project begins, both sides will be left scrambling—and often disagreeing—about how to handle problems or even customary matters like payment. The second benefit of securing written agreements is that they will indicate when you actually do not have a deal. When a true meeting of the minds happens, both parties will tend to agree on the basics of the agreement and put it in writing quite

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