The job a homeowner has asked you to do is less than $1,000 of work. Is it really worth writing up a construction contract for a small job? We see it happen all the time: a contractor convinces himself he can do a smaller job on a handshake and winds up utterly screwed when things don’t go according to plan. For such a common issue, there is a surprisingly easy solution. All you need is a contract.
Why do you need a construction contract?
Let’s talk about the risk of not having a contract (or something in writing explaining what you are going to do) for your construction project before you begin the work. Imagine that a homeowner needs a new door. You give them a price and tell them you will replace the door and that it will take you a week to complete the work. Once you’re hired, you replace the door, and when you are done, the homeowner is upset because the door you installed is wood grade, and they insist it needs to be painted and needs a new door sweep. To you, it was clear that the price you gave did not include paint and a new door sweep. Even after a letter from the homeowner’s attorney, you decide not to do the additional work and get sued as a result.
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In a lawsuit, either a judge or jury determines what exactly your agreement is with the homeowner. The judge and the jury were not there when you made the agreement with the homeowner, so they will listen to both sides and then decide who is in the wrong. The judge and the jury will literally be judging you based on your credibility. So, when you do not have a construction contract, you either must bend to the whims of the homeowner or allow a judge and jury to decide who is telling the truth based on what they find to be credible.
Do not leave your fate up to the judgment of strangers. Take the time to create a written agreement. It does not take much time or money to get a custom construction contract drafted. Once you have an understandable contract made specifically for your business, you can use it repeatedly. Even if you don’t have the time or money to have a contract drafted by an attorney, a handwritten invoice or an email outlining the work you will be doing and other important aspects of the agreement is better than nothing.
Negotiate Better Construction Contracts
At The Cromeens Law Firm, we have extensive knowledge and understanding of construction contract laws and are licensed in Texas, Georgia, and California. We are often able to solve contract disputes for our clients through informal negotiations, mediation, or arbitration. Work with us to equip yourself with the ability to properly evaluate your risks before you sign and negotiate your next subcontract with greater confidence and ease.
Why you should always have a signed construction contract
We currently have a client that builds new homes from the ground up. He signs a contract with the homeowner and builds the house based on the owner’s plans. A homeowner asked my client to act only as a construction manager, meaning that he did not handle the money but was responsible for hiring people and making sure they did their job correctly. Toward the end of the project, my client hired the roofing contractor, and the homeowner said he could handle the rest of the project. The homeowner paid my client what he owed him, and the two of them went their separate ways.
When Christmas Eve came around, our client was out playing golf when he received a frantic call from his wife, saying the roofing contractor had just sued them. The owner of the project did not approve of the work done by the roofing company and did not pay them. Still, since our client had hired the roofing contractor instead of the owner, the client got sued for nonpayment. One of the quickest ways to get our client out of this mess would have been a contract stating that he was only hired as the construction manager. Unfortunately, there was not a contract to begin with, and now we are in for a fight.
You have no idea what landmines you might hit by failing to have a contract or how much not having one will cost you in the long run. You must take the first step and get every agreement in writing, no matter how small the project is. Protect your company, protect your family, and take the time and money to get your custom construction contract done right. Contact our full-service construction law firm, The Cromeens Law Firm, today to get a head start on the quality contract creation services your business deserves.
This article is intended as a general educational overview of the subject matter and is not intended to be a comprehensive survey of recent jurisprudence, nor a substitute for legal advice for a specific legal matter. If you have a legal issue, please consult an attorney.