STA Construction Law Bulletin:
Construction contracts are often treated as annoying afterthoughts. At the outset of a project, all the players are on good terms, everyone knows — or they think they know — what is expected from each player, and spending a lot of time on the details of a written contract seems unnecessary.
Nothing could be further from the truth. The contract is an essential piece of a construction project. It is the means by which the parties can assign and shift risks, and reduce the risks of loss.
A well-written contract does not simply establish the price for a project. Among other things, it clearly defines things like scope of work, each party’s obligations, the conditions under which price or time for performance may be modified, the conditions under which work may be stopped or delayed without penalty, the consequences of any breach, the law that governs the contract, and procedures that must be followed for resolving disputes. For contractors, a good contract helps guarantee that a project will be profitable. For owners, a good contract helps guarantee that they will get the completed project they want at the right price.
In short, having a good contract helps ensure the success of a project, helps prevent disputes from arising, and, if disputes do arise, helps to more efficiently resolve disputes. The most expensive construction disputes often have their roots in a poorly drafted contract (or, even worse, an oral contract). Spending more time on the details of your contract can save you a lot of money down road.
We are sending this bulletin to bring useful and timely information to our clients and colleagues. It is only information we hope you will find interesting or useful and not legal advice. You should not rely on any information or views in this bulletin as legal advice on any specific legal issue you may have. Please contact your Skelton Taintor & Abbott attorney for specific legal advice. U.S. Treasury rules require us to tell you that any U.S. Federal tax advice contained in this communication (whether distributed by mail, email or fax) is not intended or written to be used and cannot be used by any person for the purpose of avoiding U.S. Federal tax penalties or for the purpose of promoting, marketing or recommending any entity, investment plan or other transaction.
Skelton Taintor & Abbott is a full service law firm providing legal services to individuals, companies, and municipalities throughout Maine. It has been in operation since its founding in 1853.