If you are the owner of a property and you are engaging in a contract with a builder in order to start a construction project, you might feel overwhelmed by the small print. It is important that you take your time in reading through the terms and signing.
Construction law can be complex in the state of Colorado, so it is important that you spend time reading about the law and getting your concerns addressed. The following are some of the most frequently asked questions regarding construction contracts.
What is the difference between a fixed price contract and a lump sum contract?
A fixed price contract means that the builder will be paid the same amount for the project no matter whether they stick to schedule. A lump sum contract includes incentives for meeting certain deadline and can include penalties for not getting the job done within a certain specification or time frame.
When should I embark on a time and material contract?
If the time frame and scope is not fully defined, a time and material contract will involve paying the builder for the amount of work that they do and the amount of materials that they use.
How should I prevent disputes from arising?
It is a good idea to include an arbitration clause in the contract. This means that any dispute that arises will not go to court.
If you are entering a construction contract with a builder, it is very important that you carefully read the contract before making a commitment. Failing to do so can land you in legal hot water.