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A contractor in the context of construction may be defined as any person who in any capacity undertakes, offers to undertake, purports to have the capacity to undertake, or submits a bid to, or does himself or by or through others, perform construction. Construction may be defined as the performance of building, altering, repairing, adding to, subtracting from, improving, reconstructing, moving, excavating, wrecking or demolishing any building, highway, road, bridge, or other structure, project, development or improvement to real property, or to do any part thereof, including the erection of scaffolding or other structures or works in connection therewith. The business of building or construction contractors is one that state legislatures regulate in the interest of the public welfare.
A building and construction contract generally provides not only for the construction of the project, but also for many matters that are incidental to the project. For example, such a contract may provide for the carrying of liability insurance, workers' compensation, and fire 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. Of course the amount and method of compensation is an important part of such a contract.
A building and construction contract often incorporates by reference the plans, drawings, and specifications and therefore does not need to be a long and complicated document. Such a contract should describe the project, identify the parties, set the price and the method of payment, designate the time for completion, and specify the other documents involved, incorporating them into the contract by reference.
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