A new home or large remodel involves a lot of people with different interests who need to work cooperatively to accomplish a single goal – completing your project. This includes the owners, designer, contractor, subcontractors, suppliers, lender, and others such as town officials. The three main tools for communication among this group are the plans, specifications, and contract. Take one leg of the stool away and things get murky pretty quickly. If the owner and contractor start out with different expectations about the project or the process of getting it built and paid for, conflicts along the way are likely. The phrase “I assumed…” is the source of many misunderstandings in construction projects.
Without a written contract, the plans and specs are of limited value as they describe what is to be built, but not who is responsible for what tasks, how you will handle payments, changes to the plan, hidden conditions, delays, construction quality, defective work, warranty issues, and the resolution of disputes should they occur.
In fact, a well-written contract will help prevent most disputes before they occur by establishing clear ground rules for everyone to follow. Clear ground rules will help align expectations, and help keep small conflicts from growing into large disputes. While it is uncomfortable for many people to discuss these sticky issues up front, it’s far better than waiting until you are embroiled in a big dispute. While a good contract is no substitute for good relations between the owner and contractor, it’s foolish to start a large project without one.