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Avoid a Contract Dispute Through Drafting a Watertight Agreement

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Contract Disputes on Thursday, September 17, 2015.

Before embarking on a construction project, having a well-drafted construction contract is vital. There are numerous variables that will have to be addressed to protect a California contractor. Financing, escalation of material prices, dealings with local governments, potential defects and more can have significant financial consequences for the ultimate success of the project and even lead to a contract dispute.

The guidance of an experienced construction contract attorney can be invaluable in drafting the contract and in providing advice with regard to the preparation of the project prior to drafting a contract. The purpose of a construction contract is to assign the rights of each party, as well as delineating responsibilities and duties. A well-drafted agreement can reduce risks of misunderstandings and may prevent expensive litigation at a later date.

The various parties in the contract must be clearly specified, and the scope and pricing of the project must be noted. Furthermore, timelines must be stipulated, along with payments and the retainage portions of payments. If a loan or another type of financing is involved, the details must also be spelled out in the contract.

Regardless of the relationship between the contracting parties, verbal agreements — even covering one small detail — can be detrimental and could even jeopardize the project. There are many additional issues to address to avoid a contract dispute, and the complexity varies according to the scope of the project. California contractors may find comfort in knowing that the services of attorneys who focus on the prudent planning and drafting of construction contracts are available to assist in pursuing the completion of profitable contracts.

Source:, “COMMERCIAL FINANCE 701 — Construction contracts and risk mitigation“, Sept. 10, 2015

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