SIMPLE CONSTRUCTION CONTRACTS

Many small repair or remodeling jobs are done using one-page proposals available through office supply stores. Using one of these is better than getting nothing in writing, as long as it contains the basic elements of a construction contract. At a bare minimum, a proposal to do work, which is a legal binding contract if signed by both parties, should contain at the very least the following:

  • The names and contact information of the owner and contractor
  • The location of the work
  • A detailed description of the work to be completed (scope of work)
  • The cost of the work and a payment schedule
  • The signatures of both parties and the date

 A bare-bones proposal:

______________________________________________________________________________________________________
Fly-by-Night Construction
100 Main St.
Anytown, USA
888-000-0000

Proposal Submitted to Date
Company Name Home Phone Work/Cell Phone
Street Address  Job Name Job Location
 City, State, Zip Proposal good until:

We hereby submit an estimate for the following work:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

We propose to furnish labor and materials, in accordance with the above specifications for the sum of:  $____________________      (_________________________Dollars)

Payments shall be made as follows:______________________________________________________

_________________________________________________________________________________

______________________________________________                                                                                                                    Contractor’s Signature

Acceptance of Proposal: The above price, specifications, and conditions are satisfactory and are hereby accepted. You are authorized to do the work as specified. Payment shall be made  as described above.

____________________________________________        __________________________

Owner’s Signature of Acceptance                                                                  Date

______________________________________________________________________________________

 

WHAT’S MOST IMPORTANT?

In the bare-bones proposal, the most important item is the description of the “scope of work,” a common source of conflict on construction jobs. “I thought your bid included priming and painting the new trim?” “What do you mean I have to pay $2,000 to bring in fill – wasn’t that included in your estimate?” A conscientious contractor will describe specifically what work he is providing, and if there is any ambiguity he will also spell out work that is specifically excluded. The more specific the language describing the scope of work, the better. In larger jobs the scope of work is generally defined by the construction drawings and the written specifications.

Good and poor specifications, some examples:

  • Good: “Decking to be 1-inch Trex composite decking, with square edge, installed with The Trex Hideaway Hidden Fastener System, in accordance with the manufacturer’s instructions. Color to be selected by owner.”
  • Poor: “Composite-type decking, Trex or equivalent, fastened with hidden fasteners.”
  • Good: Exterior trim shall be primed all six sides with Benjamin Moore Latex Primer 169, and receive two top coats of Moore Exterior Acrylic Latex Semi-Gloss K588.
  • Poor: All exterior trim to be primed and painted with Benjamin Moore latex paint, or equivalent.
  • Good: Ceramic wall tile to be installed with latex-modified thinset mortar over 1/2-inch Hardibacker fastened to wood framing with corrosion-resistant screws, in accordance with the manufacturer’s instructions. All Hardibacker edges to be backed by solid framing. Grout shall be polymer-modified and sealed with Aqua Mix Sealer’s Choice Gold, from Custom Building Products. At all corners, tub edges, and changes of material, tile joints shall be grout-free and sealed with a resilient caulk to match the adjoining grout. All work shall be done in a workmanlike manner.
  • Poor: Ceramic wall tile be installed over tile backerboard with thinset mortar. Grout shall be installed with movement joints, as needed, and sealed upon completion.

Over the years, I’ve learned to assume nothing about the scope of work that is not in writing. If the work description or construction drawing is not specific, you won’t really know what you’re getting until the job is done. You may be happy with it or not, but changing it at this point is always expensive and who will pay for the changes will always be contested.

If you know what you want, specify it down to the last nail. Do you want the nail holes filled with a color-matched putty on your natural woodwork? If so, put it in the contract. Otherwise you might find yourself filling several hundred holes by yourself after the job is “done.” Common phrases like “or equivalent” or “to match existing” can lead to disputes over whether the contractor’s choice is really equivalent to the specified product or really matches it to the owner’s satisfaction. Better to specify a specific product. Or, where that is not practical, specify that any substitute or matching material be “approved by owner or owner’s representative.”

A BETTER BASIC CONTRACT

Assuming the bare-bones proposal above contains an accurate description of the work, possibly referencing a drawing or blueprint, at least both parties have some idea of what it is they’ve agreed to do. A much better bare-bones contract should also contain the following:

  • A work schedule
  • Quality standards
  • Change order policies
  • Warranty information

You can add these to the basic proposal, above, to come up with a usable contract for small remodeling jobs, like reroofing, painting, building a small deck, or other jobs that are relatively brief, simple, and inexpensive. A modified proposal that addresses these issues might look like this:

A sample better proposal:

_____________________________________________________________________________
Quality Builders
100 Pine St.
Anywhere, USA

Proposal Submitted to Date
Company Name Home Phone Work/Cell Phone
Street Address  Job Name Job Location
 City, State, Zip Proposal good until:

We hereby submit an estimate for the following work: ______________________________________________________________________________

_______________________________________________________________________________

______________________________________________________________________________

We propose to furnish labor and materials, in accordance with the above specifications for the sum of:  $____________________       (_________________________Dollars)

Payments shall be made as follows:___________________________________________________

______________________________________________________________________________

______________________________________________________________________________

Work shall commence on or about_____________________________ and will be completed in approximately ___________________________ (days/weeks), subject to changes in the plan approved by the owner and events and conditions beyond our control.

All material is guaranteed to be as specified above. All work shall be completed in a workmanlike manner, in accordance with standard industry practices and manufacturers’ instructions. Any deviation or alteration from the above specifications that involves extra costs will be completed only upon executing a written change order, and will require extra charges and time to complete, above and beyond this estimate. Owner shall carry fire and other required insurances. Contractor shall carry General Liability Insurance and Workers Compensation Insurance for all employees. All labor is guaranteed against defects for a period of one year from the date of completion.

 Acceptance of Proposal: The above price, specifications, and conditions are satisfactory and are hereby accepted. You are authorized to do the work as specified. Payment shall be made as described above.

Owners’ Signature(s) of Acceptance                                                                  Date

___________________________________________   ____________________________  _________________________________________________________________________

 

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