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6 Disasters that can Happen because of a Bad Construction Contract

A bad construction contract is a disaster itself, but it can cause more serious disasters when signed and implemented.

6 Disasters that can Happen because of a Bad Construction Contract

Monday March 04, 2019,

4 min Read

It basically covers what are the events that should happen as a construction phase progresses. It serves as a guide for all parties involved, whether if you are the business owner, homeowner, contractor, supplier or builder. Also, it should detail everything.

This is why making sure to construct a good contract is a must before finally deciding to sign it. Going over the respective terms, obligations and technical specifications before executing a contract can help you pinpoint what can go wrong before it actually happens.

Here are some disasters in the form of contracts disputes that could happen if you are not keen enough.

1. Miscommunication or Unresolved Differences

If there are unclear terms present in the contract, a misunderstanding is bound to happen. Suddenly throw in and request a contract variation then your contractor and builder will lose their minds.

So, it is important to always keep things clear before progressing to the construction phase and even during building. Constantly communicate with everyone throughout the construction process and you can avoid an emotional debate with all parties involved while looking for what went wrong.

2. Negligence in key terms and obligations

Keeping things clear is vital so that you would not get to forget any key terms or obligations during construction. Because if one party forgets to comply something about the contract, a contract dispute will surely follow.

This will be considered as negligence. The person who fails the concerned term or obligation must be ready to prepare some kind of compensation. That compensation would depend on which term or violation the party failed to do and what specific laws say.

3. Mismanaged payments and council approvals

In building a house or a commercial establishment, there are lots of things that you are about to spend money with. That makes building an worthy investment for you, so you would want to become satisfied with what you paid for.

So it is important to secure the necessary permits needed to start construction. It is also important to have a progress payment system to ensure that the people working in the building projects get paid on time. Else, you not only have a contract issue, but also a payment dispute.

4. Lack of knowledge in building and construction

In the first place, you must know what your builder and contractor can do for your building project. Before signing your contract, make sure that they have the necessary licences and certifications in order to work in the building project.

Also check what other people have to say about them, specifically their past clients. This is important so that you are sure that they can carry out work with skill and care. So that, you can be assured your house or building is in the hands of the experts.

5. Poor work Quality

If you forgot to double check the specifications of the materials your contractors are about to use, you may not realize that they have used poor quality materials. So, it is better to check if they are using materials worth spending money for rather than substandard materials that can easily be worn out.

The same can be applied for contractors doing poor workmanship. You must also double-check their skills if they can their respective work properly. Making sure that you have invested in the right people will help you avoid building defects- a disaster that can be tedious to resolve.

6. Progress Delays

If you did not indicate the specific time frames of the building project in your contract, then you are in big trouble. It may cause the project to become disorganized, and the house or building gets completed in a later date. And it can be a loss for you as the property owner since you cannot use the building for your use as expected, especially if you are a business owner.

Delays do not only happen with the actual construction. It can happen in terms of payment such as late payment or non-payment for additional work. So in preventing sudden extra charges or any other money problems, make sure to keep time frames and quotes as clear and complete as possible. Else, you may cause the bankruptcy of a builder or contractor making it harder to recover possible debt.

So, it is better to review your contract before signing it as prevention for these instances. But, if disaster has already struck, it’s not the end of the world yet. You can always consult a construction lawyer so you can know how to deal with your contract disputes.