Drawing Up a Contract
Published: August 3, 2006
Once the interrogations are over and you've chosen a contractor, it's time to sit down and sort out the nitty-gritty. No matter how trustworthy you feel your contractor is, don't rely on a handshake and a promise. You need to agree the terms of a contract, and most importantly both sides need to sign it before the work starts.
I've found that clients are often reluctant to sign a contract but with everything in writing, everyone is clear about costs and the exact nature of the work. Three months down the line there should be no surprises, false expectations or long drawn out arguments about who said what.
You've probably already agreed on the price so you just need to decide on the payment stages and ensure that you set back 10% of the total price until the job is completed to your satisfaction. It is a really important part of the contract so make sure the payment plan is appropriate and fair to both sides.
Set a date for the work to start and equally important, get a timeline for the job. It's no good being told it's a five-week job if those five weeks are spread out over five months.
The contract should also include any architectural drawings and plans, a thorough description of the work, details of warranties, what happens in the event of faulty equipment or poor installation, liability insurance and the consequences if you don't pay the bills.
Even with the best laid plans, not all jobs will go according to plan. A good contractor will spot obvious problems when quoting for a job and they should explain the extra costs involved or at least suggest contingency plans. But there are some problems that aren't easy to figure out until the demolition stage of the project starts.
When a problem arises that is going to cost the contractor extra time and money, don't think about tinkering with the contract, it's time to draw up a change of specification or a change order. This mini contract should have details of the extra work and the extra costs involved.
If you decide after the job has started that you want more work to be done, it's time for another change order. Be warned though, if you've asked for extra work and it involves a lot of extra time for planning and buying materials etc, you will be charged a set fee for the time it has taken to work on the new quote.
You should also think about permits. Yes they cost money and many home owners would rather save time and spend their cash on something else but they do provide a form of consumer protection. Any decent contractor should have no problem doing the work to code and it will also offer you peace of mind. The work is inspected before the job is completed so any potential problems in that new wiring or vapour barrier for example, can be spotted long before it has been covered up and the final cheque handed over.
While you're reading the fine print, don't forget to agree on the little things that can make a huge difference to your working relationship. Find out what a contractor needs in terms of access. Will you need to be out of the house or will certain rooms be off-limits? Will they need to park a trailer on you lawn to take away debris? Is it okay for the crew to use your downstairs bathroom, etc? What time will they be on site and when can you expect them to finish each day?
It may be your home but when getting a contractor in to do work, treat it as strictly business and it could be the start of a beautiful working relationship.