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Understanding what makes a good construction contract

On Behalf of | Jul 13, 2020 | Construction, Real Estate Law

Especially if this is your first major project—whether as a property owner or as a real estate developer—you may find yourself wondering what goes into a thorough construction contract. After all, it would not bode well for your building or development plans to come to a halt in the wake of a dispute. Consider the following categories as you approach your agreements with the other entities involved in your project.


Ensure that your construction contract has a realistic timeline that does not conflict with your scheduling and the scheduling of the other involved parties.

Payments and prices

A thorough contract will clearly address pricing, payment methods and penalties for missed or late payments. Consider also addressing fees and prices should the project require additional work.


What materials is the construction company using? Is everyone on the same page regarding expectations? A good contract will specifically address the materials preferred by the developer or owner so that there are no surprises when all is said and done.

Dispute resolutions

In a construction contract, it is quite common for disputes to arise because there are so many entities involved who all have an interest in the project. A contract that addresses dispute resolution preferences may potentially save parties time and money.


It is possible that the project may need to start prior to the finalization of all your agreements. In this case, be sure your contract is not permanent so there is room for negotiations, and a sturdier, mutually beneficial agreement may take place.