Basic Construction Contract
Understanding this form
The Basic Construction Contract is a legal document used to formalize the agreement between a property owner and a contractor for construction work. This contract outlines the scope of work, payment terms, deadlines, and responsibilities of both parties. It is essential for ensuring that both the owner and contractor have a clear understanding of their obligations, which helps prevent disputes and misunderstandings during the project.
What’s included in this form
- Date of agreement and parties involved (Owner and Contractor).
- Detailed description of the work to be performed (Exhibit A).
- Completion date for the project.
- Contract price agreed upon by both parties.
- Change order provisions for modifying the contract terms.
- Payment procedures including progress payments and final payment.
- Responsibilities of the contractor, including safety and materials.
- Termination clauses for breach of contract.
- Governing law and dispute resolution methods.
Situations where this form applies
This Basic Construction Contract should be used when a property owner hires a contractor to undertake construction work. It applies to both residential and commercial projects. By using this form, you establish legally binding terms regarding the scope of work, payment schedules, timelines, and responsibilities, which is crucial for managing expectations and reducing the risk of conflict throughout the construction process.
Who can use this document
- Property owners looking to hire a contractor for construction projects.
- Contractors who wish to establish a formal agreement with an owner.
- Construction managers overseeing multiple aspects of construction projects.
- Homeowners planning renovations or significant repairs to their homes.
- Real estate developers engaging contractors for development projects.
How to complete this form
- Identify the parties by entering the names and addresses of the owner and contractor.
- Specify the date of the agreement at the beginning of the contract.
- Detail the anticipated work and include any necessary exhibits reflecting the scope.
- Agree on a contract price and completion date, ensuring all financial terms are clear.
- Include provisions for change orders to manage any adjustments to the initial agreement.
- Both parties must sign and date the contract to formalize the agreement.
Notarization guidance
In most cases, this form does not require notarization. However, some jurisdictions or signing circumstances might. US Legal Forms offers online notarization powered by Notarize, accessible 24/7 for a quick, remote process.
Mistakes to watch out for
- Failing to include specific details about the scope of work.
- Not specifying a completion date, leading to misunderstandings about project timelines.
- Omitting signatures or dates, which can invalidate the contract.
- Neglecting to address potential change orders or payment procedures.
- Assuming verbal agreements are sufficient without confirming in writing.
Advantages of online completion
- Convenience of instant access and download from any device.
- Edit and customize the document quickly to suit specific project needs.
- Reliability of having a legally valid form drafted by licensed attorneys.
- Reduces the hassle of traditional paper contracts with easy sharing options.
Form popularity
FAQ
Revenue from fixed price construction contracts is recognised on the percentage of completion method, measured by reference to the percentage of labour hours incurred upto the reporting date to estimated total labour hours for each contract.
Step #1 Sort Paper Into Manageable Piles And Be Quick About It! Step #2 Simple Data Entry. Step #3 Payroll And Tax Reporting. Step #4 Reconcile Bank & Supplier Statements. Step #5 Complex Journal Entries. Step #6 Prepare Tax Reports. Step #7 Key Performance Indicators.
There are two generally accepted accounting methods used to account for construction contracts; the percentage of completion method (PC) and the completed contract method (CC).
Identifying/Contact Information. Title and Description of the Project. Projected Timeline and Completion Date. Cost Estimate and Payment Schedule. Stop Work Clause and Stop Payment Clause. Act of God Clause. Change Order Agreement. Warranty.
Accounting for a Project Under ConstructionConstruction Work-in-Progress is often reported as the last line within the balance sheet classification Property, Plant and Equipment. There is no depreciation of the accumulated costs until the project is completed and the asset is placed into service.
#1: Review Your Bid. #2: Review Complete Plans. #3: Review All Specifications. #4: Visit the Job Site. #5: Review the Job Schedule. #6: Complete a Project Checklist. #7: Verify Project Funding. #8: Read Complete Contract.
Name of contractor and contact information. Name of homeowner and contact information. Describe property in legal terms. List attachments to the contract. The cost. Failure of homeowner to obtain financing. Description of the work and the completion date. Right to stop the project.
