What Is a House Construction Contract?

A house construction contract is a document that a labor contractor and a client have when they have to do a construction project. It contains the scope of work for the project. The contract gives protection to both parties and details their rights and obligations. The charge for the work is stated. All the details of the project are identified in the contract. If there are changes that have to be made in the agreement, they are also stated in the contract. The contract has all the terms that the client and the contractor have agreed upon.

You need security when you are about to build your home. You have to ascertain that the contractor that you have hired will finish the project. The contract can give you an assurance that the contractor will provide professional services that will not be hindered by lame reasons. Through the contract, you will have the contractors engage in the work. Building a home may take some time. So, you need the commitment of the contractors to do the job. They have to allot a certain time when they can finish the work.

By having a house construction contract, you can also be assured that you can hire the right contractor for the job. You can be reassured with licenses that contractors can show you before the work begins. You can ensure that you can have skilled workers who will be dedicated to building your house. Through the contract, you can be confident that there will be adept people who will be working for your home. You need this assurance because starting to construct a house is costly. If you will not find the right contractor, you may just be wasting your money. So, a contract is needed so that you can have the security that the contractor will build a great home for you.

When having a house construction contract, you may want to have a new home construction contract checklist. By having this, you can focus to have the best provisions in your contract. You can include everything important in the agreement. You can be sure that you can have your preferences for the project. Be sure that all the provisions of the contract will be according to all your requests. So, it is needed that you should negotiate first with the contractor. Agree on common terms that can make the most out of the agreement. This way, you can have a good house construction contract ahead of you.

Types of House Construction Contracts

House construction contracts can come in different formats. They can depend on your personal preferences. Every type has a different job that it entails. Read and consider the following to know some of the types of house construction contracts:

Unit-Pricing Contracts: Unit-pricing contracts are the contracts that are used in bids. These are common in federal projects. In this type of contract, the contract has a standard price for the work. There will be no markups for the units needed for the project. This standard price will be known by the client. It is up to the client to accept the price.Time and Material Contracts: If you have uncertainty about the project, this type of contract will be beneficial. This is a kind of cost-plus contract. The client can pay hourly or daily, just as long as the client needs the work of the contractor. There will not be a fixed fee or percentage. Though, the contractor can give a maximum price for the project. This can give peace of mind to the client.Cost-Plus Contract: In a cost-plus contract, the costs of the materials and the costs of the labor should be given by the client. There will be a fixed fee for the maximum price of the project. When there is uncertainty, clients can omit details from the contract when the work is underway. This type of contract can protect the contractor.Lump-Sum Contracts: This is also called a fixed-price contract. You will have a fixed price for the job that will be given. This has a clause about liquidated damages and penalties.

Elements of a House Construction Contract

Each type of contract contains different sections depending on its purpose. These sections are also known as elements. In a house construction contract, the following elements are the following:

Contractor’s Name: You have to identify the name of the contractor. State his or her phone number, email address, and company address. You should also include his license number. You have to state that this person is one of the parties to the contract.Homeowner’s Name: This is the other party which is the client. State the name of the homeowner in the contract. You have to include his or her phone number or email address. Clearly identify the address where the property will be built.Property Description: In legal terms, you need to describe the property. You can use the description in the county clerk’s office. Have a definite description of the property.Attachments: The contract should have attachments that have something to do with the property. List all the attachments that you have to include. Include any blueprints or specifications for the job.Project Cost: The project cost will be the amount that the client has to pay the contractor. Lists all the costs that will sum up to the total costs that you will ask the client. You should have a decision on whether the client will pay in installments or in full. You should also write if there will be a down payment for the work. List the pay dates and the amounts that need to be paid.Termination: There should be a termination clause in the contract. If ever one of the party will wants to end the contract, you should have a choice to have. Sometimes, homeowners cannot have financing. So, you have to explain how the client can terminate the contract.Scope of Work: You should describe the work that should be done. Have a scope of work that will tell what the contractor can do for the project. The project scope is important because the client should know what to expect. The client should have the scope of work and the estimated date of completion. When having a scope of work, you have to listen to the client’s requests.Right to Stop: There should have a stop-work clause that will tell that the project can stop when the client is not paying you anymore or the client has failed to pay you. State a provision that will tell how you can terminate the contract.Right to Withhold Payment: If the work of the contractor is shoddy, there should be a clause about the right to withhold payment. The client cannot pay for work which is awful. There should be a condition about this so that both parties will know when the client can refuse to pay the contractor.Remedies for Breach of Contract: Both parties will have the right to sue the other party if there will be a breach of contract. List the conditions when one of the parties can have a lawsuit. The laws will be according to the laws of your state.Requirement for Licenses and Permits: Licenses and permits are needed before the work can begin. This is to prove that the contractor is professional in the work. Check your state for the licenses that you have to obtain. Make sure that the contractor can comply with the necessary permits and licenses.Unforeseen Circumstances: You should have a clause for unforeseen circumstances or acts of God. Some unexpected things may happen and you should know what to do when these things happen. Write conditions about these so that both parties will know what to do in times of unexpected things.Inspection: You should have the necessary inspection for the construction work. The property needs to be inspected at reasonable times. You should also state that the contractor will have unlimited access to the property.Change Orders: If one of the parties will want to deviate from the contract, you should have provisions for it. Change orders should happen according to the terms that you can include in the contract. Without the conditions, none of the parties can alter the work that has to be done.Warranties: Contractors should ensure that the work will be free from all defects. If defects should be found in the work, the client can ask for additional work to fix everything. This can give confidence to the client that the work will be good.Limitation of Liability: Upon damages, both parties should know what to do. You should have provisions that will solve these unexpected things. You should know who shall pay for the damages.Signatures: The signatures of both parties are very important in the agreement. It will not be binding unless both parties sign the contract. Be sure that both parties will have clear signatures on the agreement.

How to Write a House Construction Contract

Do you need a house construction contract template? If you do, maybe you want to have some steps that you can use in writing. Well, we can provide you with some steps that you can apply. Have the following steps:

1. Define Your Purpose

The first thing that you need to do is to identify your purpose for the contract. Why are you going to have the contract? What is it for? Know your purpose so that you can have the right provisions for the agreement. By knowing your purpose, you can be directed in all the steps that you have to take.

2. Add the Elements

Now, you have to be familiar with all the elements of the contract. You should know what are the things that are included in the agreement. By knowing this, you can make the contract complete. You will have all the provisions that will avoid any disputes to happen in the future. You will know what to do in everything throughout your agreement.

3. Research the Clauses

Before making any provisions, you should research first. Know the clauses that you can include in all the sections of the contract. You may want to refer to another agreement template. By looking at a template, you will have an idea of what matters in a contract. You will know all the provisions that you have to include. Thus, you can make the right provisions for your contract.

4. Research Laws

You must be content with the provisions that you can create. You have to ensure that these provisions are according to the law. Check the law of your state to know if your clauses comply with the necessary law of your place. Study some of the laws first to ensure that you can follow the necessary laws.

5. Consult a Lawyer

You must know that you need the support of a professional in this. So, you must hire a lawyer that can help you in matters of the law. You have to ensure that your contract will be perfect. You need to comply with all the laws of your state. This is where the attorney comes in. He or she can help you so that you will have the right contract. So, consult a lawyer first before signing a contract.


Who writes a house construction contract?

The house construction contract will be better if it is written by a lawyer. A business lawyer is the one who should draft the contract. If this happens, you can be sure that your contract will be according to the law of your state. You can be assured that its provisions can benefit you. There are also times when the main engineer writes the contract. No matter who made the contract, the contract should comply with all the necessary laws of your state. So, a lawyer may be necessary for the final draft of the contract.

Why is a house construction contract necessary?

A house construction contract is necessary because you have to ensure that the other party will follow your terms. Through the contract, you can protect your interest. On the side of the contractors, you can be sure that you will be paid rightfully. For the clients, they can ensure that the project will be finished. Both can have their rights because of the contract. Both will have the confidence that they can get what they deserve.

What are the tips for a house construction contract?

The tips for a house construction contract are you have to create a vision that can make the project good, you need to draw the house so that you can have a pattern, and you need to learn the trade so that both can have the most out of the contract, you have to choose the right location for the project, you need to set a reasonable budget and timeline. You need to research or have referrals so that you can hire the best general contractor.

Having a house construction contract will be one of the first things that you have to do when you are going to build a home for your family. You can ensure the success of the construction work through the contract. You can ascertain that a great home will be built for you. Well, do you need a template for a house construction contract? This post has 11+ SAMPLE House Construction Contracts in PDF | MS Word. Use one of these templates to create a great contract. What are you waiting for? Download now!