Every successful construction project starts with a solid contract. Yet, many property owners and contractors make preventable mistakes that lead to costly disputes later. Understanding the most common contract errors can help you protect your investment and maintain strong working relationships throughout your project.
1. Not Putting Everything in Writing
A handshake or verbal agreement may seem convenient, but it rarely holds up in court. A written contract clearly defines the scope of work, payment terms, project timeline, and dispute resolution process. Always ensure the contract includes:
- The full legal names of all parties
- A detailed project description
- Start and completion dates
- A payment schedule tied to progress milestones
If a disagreement arises, your written contract becomes the foundation for resolving it.
2. Overlooking Change Order Procedures
Construction projects often evolve, but any changes to scope or cost must be handled properly. Failing to document change orders can create confusion or lead to unexpected bills. Include a clause that:
- Requires all changes to be approved in writing
- States who has the authority to make changes
- Outlines how additional costs will be handled
This ensures both parties stay informed and prevents misunderstandings about extra work.
3. Ignoring Licensing and Insurance Requirements
California law requires contractors to hold a valid license and, for most projects, carry Commercial General Liability (CGL) insurance. Before signing a contract, verify a contractor’s credentials through the California State License Board (CSLB). Ask for proof of insurance and confirm the policy details directly with the insurer. This protects you from liability if something goes wrong on-site.
4. Failing to Address Dispute Resolution
Many contracts skip over what happens when there’s a dispute. Including a dispute resolution clause, such as mediation, arbitration, or litigation, can save time and money later. For larger or more complex projects, consider having a construction attorney review the clause to ensure it meets California’s legal standards.
5. Signing Without Legal Review
A small investment in legal advice can prevent major financial losses. Construction contracts often include industry-specific terms that can disadvantage one party. Having a qualified attorney review your contract before signing helps you:
- Identify risky provisions
- Clarify vague language
- Confirm compliance with California construction laws
An experienced construction lawyer can also help negotiate fairer terms or draft provisions that better protect your interests.
Build Strong Foundations with Legal Clarity
A well-drafted contract sets the tone for your entire project. Taking the time to verify details, document changes, and involve a construction attorney early can help you avoid costly mistakes and protect your investment.
Contact us today and protect your next project with guidance from experienced California construction attorneys!
