Plain-English Contractor Contract and Document Summary

What a good one includes

• A clear breakdown of the payment schedule, including deposit limits, progress payment milestones, and any withholding clauses.
• A precise definition of the scope of work, clearly distinguishing between what is included in the base price and what constitutes an extra charge.
• Key project milestones, start and completion dates, and any penalties or extensions related to project delays.
• An explanation of liability, warranties, and insurance requirements, showing who is responsible for damage, defects, or injuries on site.
• The exact procedure for handling disputes, change orders, or contract termination if the relationship breaks down.
• A flagged list of high-risk clauses, such as unfair indemnity clauses or hidden auto-renewal terms in maintenance agreements.

Common mistakes to avoid

• Relying on verbal agreements to override the written contract, as courts will almost always favor the signed document.
• Overlooking the specific change order process, which leads to unexpected costs when modifications are made mid-project.
• Failing to identify who owns the risk for material price escalations, leaving you vulnerable to sudden budget increases.
• Ignoring the dispute resolution clauses, meaning you might accidentally agree to expensive, out-of-state arbitration.

Frequently asked questions