Our experience with construction contracts has taught us that if it isn’t in writing, chances are good that you might not get paid for your work. And, frankly, we think that’s the way it should be.
Somewhere between 40 to 70 percent of the way through a remodeling project both contractor and customer are often faced with a phenomenon known as selective amnesia where one or both forget important aspects of what they originally agreed to. At this point, the value of a handshake diminishes substantially and a well-detailed, clearly-written construction agreement begins to look mighty inviting.
A small project like replacing a doorknob or fixing a leaky faucet shouldn’t involve any more paperwork than an invoice for the repair and a check for the final payment. On the other hand, larger projects are a whole different ball game. With big projects, a good contract is invaluable.
Misunderstandings during big-budget projects that may cost you hundreds, even thousands of dollars, can be prevented with a thorough agreement between you and your client.
How many money-related issues are addressed in a well-written contract, you ask? The fact is, practically every word in a construction contract can be reduced to a money issue in one way or another. Certain parts of the contract explain exactly what you will provide in return for the money you are paid by your customer. Where other parts, like start and finish dates, indirectly address money issues.
Think about it. Start and finish dates relate to how long the project will take and therefore how long you will need to pay for a temporary toilet, a temporary job container, rent scaffolding, etc. What is your time worth and how much will it cost you if one of your project runs longer than it should because of a misunderstanding that could have been black and white in a well-written contract?
Want to be a good contractor? Don’t do a stitch of work without a good bi-lateral contract that protects you and your business and your client and the work that you are performing for them. Make sure that everything is spelled out in the agreement and leave noting to chance.
PRO TIP: And never deviate from the contract without a written change order or addendum approved by your client that signifies mutual understanding and authorization to make changes.
Handshakes and hugs, for that matter are a wonderful exchange of affection between you and your client. However, there is no substitute for a good contract. They make for enduring relationships and can help prevent job and business chaos.