As I sit down to write my annual list of resolutions for contractors, I am amazed at how much things changed in 2020. Construction was going well and then, in March 2020, COVID-19 hit. At first, we thought it was going to be a disaster for the construction industry. States, cities and towns shut down projects and many applied for PPP loans. Then, something amazing happened. Construction was considered an essential service and everyone was back to work.  That said, the work world changed: companies were donating their PPE to frontline workers, COVID-19 protocols had to be followed and paperwork had to be filed. Everyone was scrambling to figure out how to comply and keep their businesses going. So, you may or may not ask, what was I, as a construction lawyer doing? I spent March and April thinking about the new risks contractors/construction companies were facing and developing contract clauses to protect the industry. I wrote a number of blog posts with clauses to add to your contra

Why You Need a Contract

I was at a NARI (National Association of the Remodeling Industry) meeting last night and was speaking with a contractor. He said, "I don't even use contracts," and appeared troubled by the notion of doing so. I am sympathetic. I have spoken with so many contractors who reminisce about the days when everything was done on a handshake. Unfortunately, those days are long past. It is possible to view contracts in a positive light, however.

In law, the definition of a contract is a "meeting of the minds." When one considers the meaning behind these words, a written agreement is really a wonderful document. It ensures that the communication between the parties has been clear, and that each has given careful thought to his or her priorities and understanding of the job. Disputes are prevented because possible issues have been anticipated and addressed. A good contract includes so many provisions that are important, such as scope of the work, allowances, payment schedules, warranties, etc. A well-drafted contract also reflects the experience of the drafter who, having faced many projects where problems have arisen, deals with those issues and therefore prevents these occurrences in future jobs.

In remodeling, the law requires that there be a written contract for any job valued at over $1000.00. The requirements for the contract are so strict, and the penalties can be so severe, that it would be foolish for a contractor to write a contract himself or buy one from the internet without being sure that it is complete and accurate. For new construction, a builder or construction company would be wise to ensure that its contracts are well-written. For example, unless builders include that they are entitled to recover their attorney's fees if they pursue a claim against an owner, then the would not be able to recover those costs.

There are so many reasons to have a written contract for any construction project. It does not have to be viewed as a negative, but rather as a memorialization of the agreement between the parties. As an arbitrator I know said, "A good contract is negotiated, drafted and then lies on a shelf and collects dust." At that point, all parties can have confidence that the terms have been agreed upon and that the communication is clear.

Popular posts from this blog

Who Can File a Mechanic's Lien in Massachusetts?

EPA Starts Assessing Fines for RRP Violations

When You Shouldn’t Mediate Your Construction Dispute