Construction contract lawyer help protect both people who build and the people who have something built. Typically, the financial consequences in these contracts is significant. Ensuring you have proper representation is key to protecting yourself, your build or your business. The following sets out key aspects of construction contracts and what construction contract review lawyers do. The legal team at Kahane Law Office in Calgary, Alberta provides legal advise, direction, review and drafting for all stages of real estate and construction law. Call or email us today to get the help you need.
What Are Construction Contracts?
While construction contracts often look like a form, they are legally binding agreements. We detail things below, however a construction contract ideally sets out, in a clear manner, exactly what work a contractor must do, how much and when a person pays for it and consequences when someone fails to perform. A properly drafted contract often intimidates people. They have details and often span several pages of fine print. However, the details often help avoid disputes between the parties. They often protect against misunderstandings, cost and payment confusion and unnecessary delays. A construction contract lawyer helps you draft, amended, understand and negotiate the terms before you sign the agreement. Because they are legally binding, please review these contracts in great detail before you sign them!
We do not believe in form contracts. Some contractor use their own form or form contracts drafted by the Canadian Construction Association. They often contain clauses that do not apply or apply to a variety of jurisdictions. Each project has its own unique requirements and specifications. Each contract should reflect these unique characteristics.
Types Of Projects Construction Contract Lawyers Help With
Typically, construction contract lawyers help with a full range of project types. If something is build, demolished, renovated or replaced on land, then you need one of our lawyers to assist protect you, your business or your project. For example, these include some of the following:
- Building or room renovations;
- New build residential construction;
- Commercial and industrial builds;
- Land development; and lastly
- Building repairs and replacement.
Who Construction Contract Lawyers Represent
Depending on the situation, our lawyers generally only represent one party in a construction project. The risk of conflict is too great to allow for us to represent multiple parties. We believe that everyone deserves proper, unbiased representation when dealing with a build or renovation. Ideally, our clients involve us from the beginning. When a person signs a contract, unless it has a “lawyer review” condition, they are bound by the terms of the agreement. Value exists in them having a lawyer review the agreement so that they understand their risks and obligations. However, it is always better to be proactive and take steps while you have the ability to make changes to the agreement. In terms of who our clients are, we help people in each stage of construction. For example, we help:
- Construction companies and management;
- commercial builders and developers;
- industrial builders and developers;
- Residential builders and developers;
- Land owners; and lastly
- Architects and designers.
Signs Of Bad Contract Involving Construction
We often see red flags when dealing with construction contracts. Some are very easy to identify. For example, a contract that is very short is often missing key terms to set out protective and required elements. Secondly, one sided agreements leave one party at extreme risk both in term of the project and financially. Thirdly, very pushy parties to a contract should be avoided. In each instance a party presenting a contact should encourage you to get independent advice on the contract or, at a minimum, give you time to review the contract for yourself. Lastly, very general, incomplete, ambiguous or very unclear contracts often cause problems. The more clarity of party expectations in a contract, the less room for arguments exist.
Construction Contract Drafting Lawyers
Construction contract drafting lawyers, ensure that your contract is complete and detailed. A properly drafted contract is usually longer than most clients expect or initially want. When we go over the contract with our client, we ask them which provisions they want removed. They never want anything removed. Each construction contract, needs certain key terms. The specific terms included vary from project to project. In addition, the specific language in each term varies from project to project. Risk exists with using the same contract for every project. The very specific and exact language and how they apply to a specific situation is key in all contracts.
With respect to terms often included in construction contract, several exist. For example, always look for the following terms and understand their details:
These allow a party to end the contract. These terms set out when and how a party ends the contract and the consequences to both parties in the event of a termination.
Scope Of Work
One of the most important provisions. This sets out the details of the project. The more details in the contract, the less room for misunderstanding as to what will be built and included for the price.
Some disagreements often come up. Quality of work, when payments occur, damage caused by a party, interference with the project and more. Setting out terms to help make solving disagreements easier and less costly, makes for a better contract. for example, it is often better to mediate a problem in good faith than to go straight to court.
Construction blue prints, designs, plans, and even quotes have value. Clear terms dealing with who has the right to those key elements (use, re-sell, reference, etc) avoids problems in the future.
Acts of God
Sometimes random, unexpected events occur. For example, if a lightning strike destroys a project. These terms set out what happens and when in the event of these occurrences.
These clauses deals with when damage occurs and is caused by a party. For example, a contractor is negligent and a third party gets hurt on the job site. A property owner wants to be indemnified if they get sued by that hurt person. This means that the contractor pays the property owner back for any loss they have with respect to being sued.
Deadlines for construction and payment are important respectively for the property owner and contractor. Sometimes these are hard deadlines, sometimes they have a provision to let someone fix a missed deadline on notice and other times they provide for a financial consequence for missing the deadline.
When and how a party is paid is key. In addition, terms for hold backs, offsets and claw backs are important as well. Often payments occur in stages. Properly setting these out is key as is the triggers for release of any held back funds. Lastly, terms for when payments occur for change orders, increased material costs, additional scope of the work, and other provisions should be included.
Materials and Workmanship
In addition to what work a contractor does, how they do it and the materials used play an important role. Providing details means that both parties know what to expect. This avoids problems and litigation down the road.
These are only examples of key clauses. As a builder, contractor or property owner, have your contract reviewed with an experienced construction contract lawyer before signing.
Construction Contract Review Lawyers
Most frequently, construction contract review lawyers help homeowners or people building or renovating for their business. A builder or contract presents them with a contract to sign to start the project. In some case, we review contracts for builder or contractors but typically only after they had problems with their previously used form of contract.These reviews are very cost effective when you measure the cost of the review compared to the risks of signing a problematic contract. Most commonly, reviews help with specific stages of construction or contract negotiation. For example, we help with :
Construction projects involve risk. Construction contracts create or protect against risk. When you hire a construction contract review lawyer, they help you with risk assessment. Your contract should set out specific identified risk in a project. The contract sets out how those risks are managed or avoided. In addition, they set out the consequences of the occurrence of a specific risk. A contract cannot eliminate risk. A contract lets the parties know what happens with certain risks to avoid drawn out litigation if a problem comes up. Risk assessment looks at a variety of risk. For example, these include: environmental risk, terrain, risks, property damage risks, financial risks, changes in the scope of work and more.
Contract Review And Negotiation
Reviews with a lawyer serve two purposes. Firstly, they let you know the terms and rules that apply to your project. This lets you make decisions that protect you, the project and your business. This is important if contractors or property owners refuse any changes to their contract or when you signed the contract already. Always insist on a contact lawyer condition in the contract if pressured to sign right away. More important, when you review the contract before signing, the ability to negotiate the terms exists. There is no right or wrong contract. What is important is if a contract is right or wrong for you. A review lets you know your rights and obligations. It helps identify key terms missing from the agreement. in addition, it helps identify hidden risks in the contract.
Legal Obligation Compliance
All construction contract are subject to a variety of rules. These rules come from provincial and federal laws, municipal bylaws, building codes, the common law and your specific contract. When you complete a review with a construction contract lawyer, your ability to follow all these rules is enhanced. Knowledge is truly power. Knowing what you should and should not do, protects you and allows you to make informed choices.
If you are mid-project and a problem arises, understanding what happens next is key. Construction contract review lawyers help you navigate your options and and contractual rights once a problem comes up. They help avoid making a situation worse. they also help you to negotiate a solution, under the terms of the contract.
Construction Contract Litigation Lawyers
Because Kahane Law Office assists with so many real estate related matters, we also help many people when things go wrong in real estate. More information is available with respect to our real estate litigation lawyers, however, they assist clients with a variety of situations. For example, these include:
- Quality and workmanship disputes;
- Warranty claims;
- Negligent construction;
- Prompt Payment and Construction Lien Act (formerly the Builders’ Lien Act);
- Damage and Delay Claims;
- Construction Disputes; and lastly
- Negotiation and settlement of construction related issues.
Construction Mortgage Lawyers
As above, we have more detailed information on our construction mortgage lawyers page. Essentially, they assist lenders and property owners to secure and access financing for construction related projects. Typically, these loans take longer to set up, draft and fund than ordinary residential mortgages. In addition, costs to complete these loans vary as each lender has its own specification in terms of security, searches, options, drafting and reviews.
Getting The Help You Need In Calgary, Alberta
Please call us before you sign an agreement. The terms often have very significant and costly consequences. Our construction contract lawyers help you with drafting, reviewing, negotiating and defending clients with respect to these agreements. Email us or call us today in Calgary, Alberta for details.