Construction Contract
Understand what your construction contract really says before you sign.
See What You're Missing in Your Construction ContractA construction contract governs the relationship between a property owner and a contractor for building, renovation, or repair work. These contracts tend to be complex because construction projects involve many variables: materials, labor, timelines, permits, subcontractors, and the inevitable changes that come up once work begins.
Construction disputes are among the most common and expensive contract conflicts. A well-drafted construction contract addresses change orders, payment schedules tied to milestones, warranty obligations, and what happens when the project runs over budget or behind schedule. Understanding these terms before work begins is far cheaper than resolving them through litigation after the foundation is already poured. This is informational, not legal advice.
Key Risks to Watch For
Vague Change Order Process
Construction projects almost always involve changes from the original plan. Without a clear change order process that requires written approval and pricing agreement before additional work begins, costs can escalate rapidly with no accountability.
Front-Loaded Payment Schedules
If the payment schedule requires you to pay a large percentage upfront before significant work is completed, you lose leverage. Payment should be tied to verified milestones so you retain the ability to hold back payment if work quality is unsatisfactory.
No Timeline Penalties
Without liquidated damages or penalties for delays, the contractor has little financial incentive to finish on time. If your project timeline matters, make sure the contract includes consequences for missing deadlines.
Insufficient Warranty Coverage
Construction warranties should cover both materials and workmanship for a reasonable period after project completion. Check whether the warranty is limited to fixing defects or also covers consequential damages caused by defective work.
Related Contract Clauses
Learn more about specific clauses commonly found in construction contracts:
Frequently Asked Questions
What is a construction contract?
A construction contract is an agreement between a property owner and a contractor that outlines the scope of construction work, materials, timeline, payment schedule, change order procedures, warranties, and dispute resolution methods for a building project.
What should I look for in a construction contract?
Focus on the detailed scope of work and specifications, payment schedule tied to milestones, change order process and pricing, project timeline and delay penalties, warranty terms for materials and workmanship, insurance and liability provisions, and permit and inspection responsibilities.
What is a change order in construction?
A change order is a written agreement to modify the original construction contract. It covers additions, deletions, or modifications to the scope of work, along with any resulting changes to the project cost and timeline. All change orders should be in writing and approved before work begins.
Ready to analyze your construction contract?
Upload your contract for a full analysis -- plain-English explanations, risk scores, and actionable insights for every clause.
Analyze Your Construction Contract