Why You Need A Construction Contract

A construction contract is vital to a successful construction project and protecting both the property owner and contractor. It is a document signed between two contracting parties, which includes the hiring party and a general contractor. This type of contract may be used in commercial construction or home construction. It is meant to protect both parties from liability. In addition to this, the document outlines the expectations of the hiring party and the duties of the party being hired. Although some homeowners or small business owners may think such documents are not vital, there are several reasons why these construction forms are important in all situations.

  • The hiring party can expect a fair price for remodeling or building construction. No customer likes to be surprised by unexpected charges. Most contracts include a construction estimate, which shows the approximate cost the hiring party can expect to pay. In most cases, the construction estimate is based on the financial details of the contractor's bid.

  • The hiring party will know approximately how long the project will last. Project creators often read more than one bid proposal. They usually select the bid proposal that best suits their financial needs and time restrictions. After approving the time frame outlined in the chosen contractor's bid, hiring parties can add these details to the construction contract. This makes the document creator's expectations clear, and the party hired to do the work will be required to meet a deadline for the construction project.

  • The hiring party may make changes when necessary. While the construction project is being completed, it is still possible to make some changes. If the hiring party decides he or she wants changes that are possible to complete, a contract may allow this if there is an inclusion for a change order.

  • The hiring party can be protected from lawsuits. With the proper wording in a contract, the hiring party can make it clear that the general contractor and subcontractors must be independently insured. Workers may sustain injuries during the building construction process, so it is important for hiring parties to make sure they are not liable for medical bills of subcontractors.

  • The hiring party and the contractor are both protected. A contract makes the entire process easier, and contractors also appreciate the protection they provide. For example, one of these agreements makes it possible for a contractor to provide a lien notice if the hiring party does not pay. If a contractor does not have the ability to file a lien or provide a lien notice, he or she is not likely to agree to a project.


These documents are the most important construction forms. US Legal Forms offers a construction contract template that is state-specific, as well as contractor form packages at steep discounts. The terms can be customized to fit various home construction or commercial construction projects, and all contracting parties should sign the completed form.

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