Many contractors and subcontractors often avoid or ignore making sure to get their agreements in writing, especially if the job is of a short duration or the price is low or fluid. But whether the agreement is in writing or oral, the agreement to do the work is still a “contract,” which, in effect, is the LAW between the parties for that transaction. Unless there is a writing to memorialize the understandings between the parties to agreement, the contractor is opening itself up to possible uncertainties and a lack of protection in the event a dispute arises.

What Common Disputes Arise Without Written Construction Contracts?

Often times, a contractor finds itself in a case of “he said, she said” when it comes to things like, for example, (1) payment terms; (2) scope of the work; (3) insurance protections and/or (4) duration of the project. Parties to a verbal agreement often develop fuzzy memories when a dispute arises and there is nothing spelling out precisely what had been agreed to. For that reason, it is important for contractors and subcontractors, whether the job is large or small, or lump sum or time and materials, to get their agreements in writing.

What Can Go Wrong Without a Written Pre-Construction Agreement?

A recent example that Laperouse law firm was involved in related to a contractor performing a lot of “pre-construction services” in obtaining subcontractor bids and material pricing costs, issuing a construction budget, and then contacting various design professionals, subcontractors and vendors. The owner had verbally agreed to compensate the contractor for such costs but ultimately decided that the project was too expensive and cancelled it. When the contractor requested reimbursement for all the time and expenses incurred in handling the preconstruction activities, the owner balked at paying anything. Had there been a written memorialization of the agreement to compensate the contractor for such services, the dispute might have resolved itself a lot earlier.

How Do Written Construction Contracts Protect Contractors and Subcontractors?

No matter the size of the project, or the situation that it involves, our law firm routinely assists our clients with construction contract drafting, reviewing contract and subcontract forms, and assisting our clients in negotiating fair and consistent terms. Regardless of whether you seek the services of a qualified attorney to assist you in drafting your contract terms, it is important for a contractor to consider the risks in not getting its contract or subcontract in writing.