Litigation tips

Construction

Ten points to review before signing a construction contract

Almost no construction dispute begins with bad faith. It begins with a contract that did not say who approved a change, when the works were deemed accepted or what happened if the price moved. These are the ten points I review before a client signs.

  1. 01

    Scope by work item, not by sentence

    What each item includes and excludes, with quantities and specifications. A scope annex is worth more than ten pages of general statements.

  2. 02

    Drawings with version and date

    Which set of drawings governs, who approves them and what happens if a new version appears. Without that, every change is argued twice.

  3. 03

    Price and adjustments

    Base price, adjustment formula and triggering events. If the adjustment stays open, the client loses control of cost.

  4. 04

    Programme with milestones

    Dates per stage, not a single end date. Milestones let delay be measured before it becomes irreparable.

  5. 05

    Delay penalty

    Amount, cap and how it is evidenced. A penalty without a procedure is a decorative clause.

  6. 06

    Change protocol

    Written order before execution, with the price and time impact of the change. Performing first and arguing later is the most common source of claims.

  7. 07

    Guarantees and how they are enforced

    Retention, bond or trust, with the collection procedure defined. A guarantee without an enforcement mechanism protects no one.

  8. 08

    Handover and cure

    Acceptance record, observations and cure period. What is not observed at handover is later argued with expert evidence at the owner cost.

  9. 09

    Insurance and third parties

    Policies required, amounts and who answers to third parties. A site accident can end up in the owner assets.

  10. 10

    Disputes and termination

    Mandatory prior expert review, forum or arbitration, termination grounds and final settlement. Deciding this calmly avoids deciding it at the worst moment.

If the contract is already signed and the dispute has started, the review is done with the file in hand: what was agreed, what was built and what can be proven. That is the first step before filing.