Understanding Contractor Contracts: What to Look For Before Signing
Chosen theme: Understanding Contractor Contracts: What to Look For Before Signing. Before a single hammer swings, the smartest move is mastering the contract. Here, we translate fine print into practical decisions, share real-world stories, and help you sign with confidence. Subscribe for checklists and templates tailored to homeowners and renovators.
Define the Scope: The Heart of Your Agreement
Spell out exactly what is included, excluded, and optional. A reader once messaged us after discovering baseboards were not part of their ‘full remodel.’ The fix was simple: list every deliverable and boundary clearly.
Define the Scope: The Heart of Your Agreement
Require specific product names, models, and finishes. “Quality faucet” is vague; “Delta Trinsic, matte black, Model 9159-BL-DST” is ironclad. Invite your contractor to confirm availability and lead times to prevent substitutions that disappoint.
Right-Sized Deposit
Keep deposits reasonable—often 10–20% for many residential projects—unless custom materials require more. If a contractor demands most of the price upfront, pause, ask why, and consider alternatives or safeguards.
Milestones Tied to Visible Progress
Define payment triggers you can verify: framing complete, rough-ins passed inspection, cabinets installed. A subscriber avoided trouble by refusing a ‘50% after demo’ request and instead tying funds to inspection approvals.
Change Orders and Allowances Done Right
Require all changes to be documented, priced, and signed before work proceeds. One reader’s costly tile upgrade began as a hallway chat; a simple signature policy would have saved hundreds and hard feelings.
Name a start window, substantial completion date, and interim milestones. Add a plan for daily work hours and site access so weekends, holidays, and inspection windows don’t silently sabotage your expectations.
Timeframes, Delays, and Accountability
Licensing, Insurance, and Lien Safety Nets
Check the contractor’s license status and ensure permits are pulled under the correct name. A neighbor’s ‘unpermitted’ deck cost months of headaches when refinancing revealed inspection records were missing.
Licensing, Insurance, and Lien Safety Nets
Request proof of general liability and workers’ compensation, plus endorsements naming you as additional insured if appropriate. Confirm coverage dates span your project. Ask your insurer to glance at the paperwork quickly.
Quality, Warranties, and the Punch List
Define the warranty period for labor, what’s covered, and how to request service. Include response timelines. A clear process turns warranty work from a confrontation into routine follow-through.
Quality, Warranties, and the Punch List
Ensure product manuals, receipts, and serial numbers are handed over. Some warranties require online registration. Ask your contractor to assemble a simple ‘owner’s binder’ you can reference for years.
Disputes, Communication, and Termination
A Simple Communication Ladder
Name primary contacts, set response times, and escalate from project manager to owner if needed. Weekly check-ins—fifteen minutes, every Friday—kept one reader’s kitchen renovation smooth and surprisingly stress-free.
Mediation, Arbitration, or Court
Choose your dispute forum thoughtfully. Mediation preserves relationships and costs less. If arbitration is required, specify rules, location, and who pays fees to avoid surprises when emotions run high.
Termination Rights and Cure Periods
If work stalls or quality slips, a cure period lets contractors fix issues before termination. Likewise, contractors may terminate for nonpayment. Balanced clauses encourage both sides to act in good faith.
Indemnification and Limits of Liability
Indemnity shifts risk. Ensure you are not accepting responsibility for the contractor’s negligence. Reasonable limits of liability prevent catastrophic exposure while still incentivizing careful, professional work on site.
Site Conditions and Hazardous Materials
Define who handles surprise conditions—rotted framing, asbestos, hidden wiring—and how pricing and schedules adjust. Clarity here prevents panic, keeps projects moving, and avoids finger-pointing when history emerges from walls.
Ownership of Plans, Photos, and Documentation
Clarify who owns drawings, 3D models, and site photos. Allow you to use documentation for maintenance and future work. Organized records help with warranties, appraisals, and eventual resale disclosures.