Say you’ve decided on a general contractor for your home renovation. You’ve considered your options, ruled out a design-build firm, know what you want and have someone in mind for the job. What next?
Before any work begins, protect yourself. As with any business arrangement – and this is, no matter how friendly your contractor seems at first, a business arrangement – it’s important for both sides to have a set of ground rules established before work begins. That’s where your general contractor agreement comes in.
As with any contract, things can get a little confusing, when you get into the details. But knowing what to look for is half the battle, and it doesn’t take too much research to be ready to sign.
A good general contractor agreement will tend to adhere to the format that follows.
Contact Information
The first section will detail the contractor’s basic contact information, including their:
- Name
- Physical address (not a PO box)
- Phone number
- Fax number
- Cell phone number
- Email address
- HIC (Home Improvement Contractor) license number
The agreement may also include space for the same contact information of the Home Improvement Salesperson, followed by space for the buyer’s contact information, along with a space for the date the information is completed.
At the bottom of every page of the agreement, there will space for buyer and contractor signatures.
Parties Agreement
Before going in the details of the renovation project, there will be a boilerplate agreement with space to fill in the names of the buyer and contractor. For example,
“This Contract is entered into on this _______ day of ______________, 20___ by and between __________________________ (“Buyer”) and ___________________________ (“Contractor”). Buyer and Contractor agree to the following:”
General Scope of the Work
In this space, the contractor’s work will be laid out. It will essentially state that the contractor is responsible for performing all the work and providing all the labor, supervision, materials and equipment. As well, it holds the contractor to completing the project in a competent manner.
There will be a space for the contractor to agree with their dated signature.
Materials and Equipment to Be Used
This space will allow for a listing of materials and equipment and their respective prices. Other relevant information to be included is their quantity, quality, brand, model number, identifying features.
There will also be subsection in which either the contractor or the buyer agrees to provide the materials and equipment as written above.
Subcontractors
In this space, all the subcontractor labor will be listed. This will include any plumbers, electricians, and other unskilled and unskilled laborers, along with their physical addresses, phone numbers, current license numbers, and work they will provide.
Price
This space will include the total amount of the project as laid out in the contract. There will also be an agreement that the buyer will pay the contractor the fixed amount.
Progress Payments and Schedule
This section breaks down how the total cost of the renovation project will be paid. Typically, there is a section for a deposit amount, when the contract is signed, and a final payment, once all the work has been completed.
In between these two payments are a series of progress payments. Each of these payments will include a dollar amount and the corresponding work or service that the money is paying for.
The payment schedule will often include a disclaimer that the buyer’s final payment may be withheld if the contractor doesn’t provide proof that all expenses related to the project have been paid for and that there is no lien on the buyer’s property.
Right to Cancel
In most cases, the buyer may cancel the contract at any time prior to midnight of the third business day after the date of the transaction. A separate cancellation form, thoroughly explaining this right, will accompany the contract.
Work Schedule
This section will include the dates when the work will commence and be completed. The commencement date will include a provision that the buyer may cancel the contract if work isn’t begun within a certain amount of days of the expressed date.
There will be room for the buyer to state that time is not of the essence, thereby extending the timeframe of work. There will also be room to include contingencies that may affect the contractor’s ability to work.
Change Orders and Additional Work
This section states that written change orders signed by both parties are needed for any alteration of the work. There will be a breakdown of the details that must be included in any such change order.
Additional Terms and Conditions
Pages may be added after the signatures of acceptance to include more terms and conditions to be agreed upon.
Acceptance of Contract
This section provides space for buyer, contractor, and licensed salesperson, if applicable, to sign and date the contract, agreeing to all the stipulations laid out.
There may be slight differences from contract to contract, but every general contractor agreement will tend to include the sections mentioned above.
