A building and construction contract must fulfill the same requirements as any other type of contract in regard to the following necessary elements:
" an agreement;
" between competent parties;
" based upon the genuine assent of the parties;
" supported by consideration;
" made for a lawful objective; and
" and in the form required by law.
Such a contract generally provides not only for the construction of the project, but also for many matters that are incidental to the project. Thus, it may provide for the carrying of liability, workers' compensation, and fire insurance policies, designating which party is responsible for obtaining particular insurance. A building and construction contract will typically specify the duties, responsibilities, and liabilities of each of the parties, as well as those of any employed architect or engineer. The amount and method of compensation is, of course, an important part of such a contract.
The Michigan Basic Building and Construction Contract between Owner and Contractor is a legally binding agreement that outlines the terms and conditions for construction projects in the state of Michigan. This contract serves as a comprehensive document that establishes the rights, responsibilities, and obligations of both the owner and the contractor involved in the construction process. Key details included in this contract typically encompass the project scope, specifications, timelines, payment terms, dispute resolution procedures, and other vital provisions necessary for the successful completion of the construction project. The contract is designed to protect the interests of both parties involved and establish a clear understanding of the project's objectives. Some different types of Michigan Basic Building and Construction Contracts between Owner and Contractor include: 1. Lump Sum or Fixed Price Contract: This type of contract establishes a predetermined fixed price for the entire project. The contractor is responsible for completing the project within the specified budget, regardless of any unforeseen circumstances that may arise during the construction process. 2. Cost Plus Contract: This contract type involves the reimbursement of the contractor's costs incurred during the construction, along with an additional fee or percentage for their services. It provides greater flexibility for the owner, allowing changes in project scope during the construction process. 3. Unit Price Contract: In this type of contract, the owner pays the contractor based on specific measurement units or quantities of work performed. This contract is commonly utilized when the project consists of various repetitive tasks or standardized components. Regardless of the contract type, the Michigan Basic Building and Construction Contract between Owner and Contractor includes various essential provisions. These may include clauses related to insurance, permits, warranties, termination, disputes, change orders, indemnification, and compliance with local laws and regulations. It is crucial for both the owner and the contractor to review and understand the contract thoroughly before signing it. Consulting legal professionals experienced in construction law is highly recommended ensuring that the agreement accurately reflects the project's goals, protects the rights of both parties, and diminishes the possibility of future disputes or misunderstandings.
