With the recent surge in worldwide economy, more and more businesses are opening. With the establishment and growth of many businesses, the construction industry has greatly benefited, especially in developing countries, you can see a lot of buildings being constructed. Even on a smaller scale, you could see a lot of people constructing or renovating their homes.
When employing the help of a construction company, you would need to clearly lay out all the terms of your relationship. This would prevent any disagreements that could happen. You need to be sure that you have a construction agreement with your contractor. Confused as to what goes into these agreements? Well, we have construction sample agreement forms that you can look at below.
Construction Agreement Template
Construction Contract Agreement Template
Construction Contractor Agreement Template
Construction Management Agreement Template
Building Construction Agreement Forms
Building Construction Labour Contractor Agreement
Building Construction Agreement in PDF
Residential Construction Agreements
Model Residential Construction Contract
Residential House Construction Contract
Commercial Construction Agreements
Standard Construction Agreement in PDF
Subcontractor Construction Agreements
Standard Subcontract Agreement for Construction
Construction Subcontract Agreement
Construction Contract Agreements
Residential Construction Agreement
Construction Management Agreement
Standard Form of Construction Management Agreement
What Is a Construction Agreement Form?
Whenever there is a need to hire the services of a construction contractor, you would need to have a set of arrangements that need to be met by both parties. You can’t just go into a construction relationship without going through the negotiation process first. Before starting the project, you would need to sit with each other and agree on the terms of the business relationship that you are going to have. In order for the terms to be legally binding, you would need to put it into writing. The document where these terms will be written is called a construction agreement.
In a construction agreement, all the duties and responsibilities of both parties, especially that of the contractor, would need to be clearly outlined. In the agreement, you should give a concise description of the work that needs to be done. The document also outlines the total cost of the project as well as the payment terms. The construction agreement form has to contain all the necessary provisions needed in a contract for it to effectively serve its real purpose — to protect all parties involved in the project. In a construction project, it is not only the client and the contractor; the contractor may seek the help of subcontractors. You may also need to make a construction loan to help in the funding of the project. For all these transactions, you would need to have a construction agreement so that everything is clear between all parties involved.
The Importance of Standardizing Construction Agreement Forms
In order to have a smooth working relationship in a construction project, you would need to have a construction agreement between all the parties. In these projects, the parties involved would often opt to use a standard form of construction agreement. Listed below are some of the benefits of using sample forms for your next construction project:
- The standard construction agreement forms is the result of negotiations from various sectors of the construction industry. This means that all factors associated with doing a construction project have been taken into consideration. The standard construction agreement form was formed as a result of multiple negotiations from a number of people in the industry, so you are sure to have an agreement that is as comprehensive and fair as possible.
- The standard construction agreement form offers familiarity. When the forms in the construction industry are standardized, the people using the forms would become familiar with it, including the important clauses that go with it. Because of this familiarity of the terms that go in these documents, there is a lesser possibility of disputes that could happen.
- The standard construction agreement form makes the whole tendering process easier. By having a standard form for everyone, it becomes easier to compare and assess the terms that are written in it. All processes involved in the relationship, such as pricing and payment, would be done significantly faster.
Construction Agreement for Residential Home
Remodeling Contract Agreement
Agreement for Commercial Construction/Maintenance Services
Construction Loan Agreement Forms
Residential Construction Loan Agreement
Multistate Construction Loan Agreement
Commercial Construction Loan Agreement
Construction Management Agreement Forms
Construction Project Management Agreement
Risk Factors Involved in a Construction Agreement
In any relationship between two entities, especially one which involves some kind of money or value, there is often some kind of risk involved. Especially in the construction industry, there is a lot of risk that needs to be addressed carefully. For instance, the price of some materials that will be used in the project are laid out in the agreement. When there is a change in the price of that material, the original price that was agreed on and written in the contract sticks. If the price increases at a future time, the seller assumes that risk. If it decreases, the buyer carries the risk and would have to settle with the higher price that was outlined in the agreement.
In order to manage the risks that come with doing a construction project, all parties involved would need to have an agreement that addresses all these issues. These agreements can be seen as an organized system of distributing risks to all people that take part the transaction. This way, the agreement now functions as a construction contract. In a construction project, it is not only the price that is an identifiable risk. There are several other risks that need to be taken into consideration when making a construction agreement.
- Time. If the project cannot be completed on time, resulting in attendant loss, then the agreement would need to appoint who will shoulder the costs, how it will be measured, etc.
- Design. If the design that was agreed on during the negotiation process was not followed, then what actions are need to be done and what will be done to repair it.
- Act of God. An “act of God” is an event that nobody has control over. This includes natural disasters, such as storms and earthquakes, which could damage or delay the construction. In this case, the agreement needs to determine which party will shoulder the cost involved.
- Funding. Funding could become a problem during the construction process. There could be a delay on the lender’s side. This issue must be addressed in the agreement.
- Regulatory risks. When venturing into a construction project, the government is usually involved. You would need to get the necessary permits and approval on the design. If there is failure in this regard, the agreement has to detail who will be responsible for the costs.
- Unexpected conditions. There will always be unforeseen situations that would happen during the construction process. When this involves additional cost, identify which party would be responsible for taking care of the costs involved.
Prime Contract Construction Agreements
Agreement Between Owner & Contractor for Construction
Standard Form of Contract for Limited Construction
Construction Subcontract Agreements
Subcontractor Agreement Template
Standard Subcontractor Agreement
Subcontract Agreement for Building Construction
Short Form Subcontract
Road Construction Agreements
Road Preservation, Use and Repair Agreement
Road Development Agreement
Tips in Making a Construction Agreement Form
It is a major decision to take on a construction project. You would need to first determine what you want done in your home or building, how you want it to look like, how you will get the necessary funding for the project, and so on. You get the point: a construction project is not really something that is ordinarily done on a whim. Thought must be placed in making the decision. It may be as small as renovating your kitchen or building an entirely new room for your house. Whatever it is, you would need to be clear with your contractor on the terms of the project. You can do this by having a construction agreement.
However, you may be confused as to what goes into these documents. You may have no idea where to start. You must remember that the contents of the agreement are the necessary terms in order to have a good working relationship with your contractor so you have to put effort and thought into making them. Good thing we provide you with sample agreement forms that you can use for your construction project. To further help you in writing an airtight construction agreement, here are some useful tips that you can use:
- Write down the parties involved. This is pretty obvious but mind you, it’s important, or rather, the importance of getting it right, could not be stressed enough. You would need to make sure that the agreement is between the client and the contractor.
- Provide a description of the work. Be as specific as possible so that disputes are avoided. By providing a written description of the job, contractors can easily refer back to it if needed.
- Outline the price and payments. Money is a big issue when it comes to undertaking any project, so make sure that the payment terms are clearly set out in the agreement.
- Write down the important dates. Some important dates that need to be included in the agreement are the start date and the end date or completion of the project. Include the penalties that will be enforced when it is not completed on time. Also, take into consideration the unexpected things that could cause delay.
- Write down who is responsible in getting permits and insurances. There are many legal documents that are involved in a construction project and you would need to point out who gets them and who will pay for them.
- Outline the warranties. There will be a period of time where contractors are expected to fix anything that happens to the project. Mention that in the agreement.
- Mention how to handle disputes. Because litigation is expensive, you may want to consider arbitration. Take a look at these sample arbitration agreements for a guide.
A construction agreement is a vital part in any construction project. It often spells the difference between a smooth working relationship and a dispute that could result in litigation. When looking for one to use for your own construction project, save time and don’t hesitate to use our sample agreement forms.
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