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Pitfalls In Home Builders Contracts

By Expert Author: James Mcnellis

Pitfalls in home builders Contracts
Construction is not an affordable type of services. These services could make your home with all the raw materials available in the market, to a very beautiful asset composed from these raw materials. Construction contractors are responsible not just for the construction but also they are the one giving the price of the projects. There are contractors that offer honest estimation but in the contract the cost is higher compared with the estimation price. We would provide you great tips for avoiding pitfalls in home builders El Paso Texas TX contracts.

Regardless of whether or not your company wanted to have a bargaining position to negotiate the terms before signing the deal, or you are not certain if they are offering honest estimation at first, or you have no idea on these pitfalls in construction contracts, we would introduce you to the method of contractors on modifying the contract.

Gather all your documents and define what work you would assign them
You need to understand that the contract that you will be signing often is not the full set of obligation that applies to your work. You need to obtain the prime contract document as well as the project specification to acquire understanding on how all of the provisions work together and how you might be clear by these certain documents.
There are different types of Construction Contracts and they are:

• Lump Sum Contract
• Unit Price Contract
• Cost plus Fixed Percentage Contract
• Cost plus Fixed Fee Contract
• Cost plus variable Percentage Contract
• Target Estimate Contract
• Guaranteed Maximum Cost Contract


What is the prime contract document?
The prime contract’s function not only links the construction contractors to the owner but it can contain provision binding the customer as well as subcontractor or even supplier. Even though you were not a signatory to the agreement, the obligations and limitations may only be on the prime contract document but flowing down to other factors that can be substantial in number and significant in the possible damages or linked by a fixed liquidated damage amount.

Avoid Ambiguity
Try to avoid jargon or vague words like “customary” or “customizable”. These words commonly said by businessmen when they want to negotiate a contract. Most people know the meaning of this “customary” word; it is an indirectly saying that it is negotiable or modifiable. When this occurs there is would be confusion within the dueling parties’ legal team with regards to the meaning of the inaccurate contract. These would increase the chances that you and your team would lose in the court.

Avoid Delaying the Start of the Warranty Period
Some contracts have a warranty on the project or their work. It is greatly advice to work within the warranty period to begin running from the date the work is completed or approved. Some contracts drafted by owners will state that warranties begin at the completion of the project, but you have no control when the entire project is completed, resulting to your warranty may be a lot longer than you expected.

Evidences
Get everything in writing, from all the points you have agreed on the construction contract should be in writing. This is the only evidence you have when everything gets wrong and not according with the contract. A construction contractor should always draw back at proceeding without a written change order executed by all relevant parties. Taking action without a signed change order could be very risky when something on the project went wrong. Remember to put it in writing, you need to pay attention to all provisions within the contract. A careful company will follow such provisions to the letter and comply with all writing requirement. This would help you fight the contractor on court and it can be used as solid evidence against them.

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