Your General Contractor Agreement

Before you start on any home improvement project, it is important to get an agreement in writing with your general contractor. Verbal agreements work well in some cases, but more often than not, there will be a misunderstanding or problems understanding the job.

With a verbal contract, you are also not legally protected should there be a major issue. Always get it in writing! If your general contractor doesn't draw up an agreement for you to sign, you can do so on your own accord. Here's how to best ensure that everyone is protected:

Important Parts of Every Contract

Whether you are having someone build you a new house or just getting a bathtub replaced, there are specifics that every single contract should have. These include the following:

  • Specific dates for starting, working and completion: You may only be able to provide access to your work site during certain times, and you need to make that clear. In addition, avoid being vague about when the project should be complete. Use specific dates, along with consequences for delays that are the contractor's fault.
  • Insurance information: Worksites are prime for falls and other injuries. If that happens and you haven't discussed insurance responsibilities, you could have a legal mess on you hands. Along with that, talk about who is responsible for materials and tools on the job site, should they be damaged or stolen.
  • Payment information: Don't just list a price. Break down the cost as much as possible (labor, materials, etc.) and also talk about payment schedule. Will you pay a weekly portion? On a monthly basis? When the project is completely done? Also account for what will happen if the job is canceled part of the way through, no matter what the circumstances.
  • The scope of the work: Be as clear as possible when it comes to what you're hiring the general contractor to do. Details are important. Make sure that you also list things that your general contractor will NOT do. If possible cite other jobs so that quality is as clear as possible.

Common Contract Problems

Sometimes, your best attempt at a contract still leads to problems. When tempers flair, people tend to exploit loopholes in contracts. How can you avoid contract problems? Here are some tips:

  • Avoid substitutions clauses. Some general contractors include a line in the contract that allows them to substitute materials you want for other materials. While this might not initially seems like a problem, it can snowball in the hands of the wrong people. For example, Contractor A might just use this clause so that he can use a better type of caulk that he prefers for the job, but Contractor B might justify substituting an inferior product so that he can pocket the difference. Take out this kind of clause and make it clear that all changes need to go through you first.
  • Be wary of open-ended costs. Sometimes issues come up that are out of your contractor's control. For example, when replacing pipes, he or she may find asbestos that needs to be controlled, which will add additional costs to your project. However, you contract should never just leave the total cost open-ended. Some contractors will take advantage of that.
  • Read the contract thoroughly and ask for clarification if necessary. We live in a fast-paced world, and it is tempting to skip over legal jargon and just sign the contract. Don't do it. You could be skipping over clauses that are not in your favor, leaving your contractor in the clear even if he or she causes problems in the future. Make sure to read every word and ask questions if there are parts that seem unfair or unclear.

Enforcing your Contract

There's no use in having a contract if you do not enforce it. However, many homeowners find it extremely uncomfortable to confront a general contractor. So how can you talk about a contract problem without worrying that the situation will escalate?

  • Don't threaten with your first warning. Start by having a simple conversation that isn't too demeaning or threatening. Just talk about why you're having a problem thus far. Sometimes, there was simply a misunderstanding and your general contractor will clear it up right away.
  • Continue to get things in writing. While it is okay to have a first conversation verbally, if things aren't cleared up right away, send a second warning in writing, via certified mail. Your third letter should give a clean date by which changes need to be made, along with consequences, and your fourth letter should serve as an official way to fire your contract, should you need to. By having things in writing, you'll be able to prove your case in court if you have to at a later date.
  • Make changes to your contract as needed. Both you and your contractor should initial any changes that you make, like a price change or using other materials. Don't verbally change your contract without written changes as well.

In most cases, you won't need your contract. In general, you can get your project done without a lot of hassle as long as you work with a good general contractor. However, it is always better to be prepared with a document that helps both parties understand expectations and consequences.

Posted by: TrustedPros
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