by Quenda Behler
You probably write your own contracts. By that I mean you buy a
form book or copy contracts from other jobs. As someone who
writes form books, I can tell you that it's fine to do
I regularly advise people that writing construction contracts
does not involve rocket science.
What Steps to Take
Still, there are pitfalls to using ready-made contracts. It's a
poor idea, for instance, to simply fill in the address blanks
and write a five-word description of the job. Even if we're
talking about handyman work, there are details that need to be
hammered out ahead of time.
Hidden conditions. When filling out
the contract, start by looking at the job carefully and
thinking about the problems you might encounter. Make sure your
contract covers those surprises. If you're replacing a window,
say, and the surrounding frame turns out to be full of dry rot
or bugs, who will pay for the extra work and materials needed
to repair the damage?
A good form will already have a hidden-defects clause in it.
Even so, you may end up with a customer who thinks you're a
crook because you estimated the job at $500 and it's running
close to $1,000. Guess who he won't call when it's time to put
on an addition.
Explain what's in the contract. Which
brings us to another important step you need to take before the
job starts. When you hand this contract to your customer, say a
few words about what's in it and why. Talk about the kinds of
unexpected problems you could run into and explain that there's
no way to know about them until you begin taking things apart.
Explain that there are variables you simply can't nail down
beforehand — such as knowing exactly how long the job
will take or precisely what it will cost.
Also, be sure that your contract makes it clear who is
responsible for what and when. Who will supply the electricity?
When will payments be due? Who will get the permits? When is
the customer supposed to make the property available to you?
What does "available" mean? Does it mean unlock the door for
you, or get those kids and animals out of the way?
What exactly do you mean? The third
step you need to take with your customer — and this is
really crucial — is to make absolutely sure you're both
talking about the same thing.
For example, let's say you offered the customer a contract that
said "paint-ready," because the customer wants to do his own
painting. When you say paint-ready, you mean when you're done
with the drywall, taping, and rough sanding. But maybe your
customer thinks paint-ready means something else: that all he
has to do is open the can and starting spreading paint over the
The Customer Is (Almost) Always
According to the courts, even if you did get the contract off a
pad of forms you bought at the lumberyard, you wrote it and
therefore it's "construed" against you. Construed is a legal
word meaning that the author of the contract is stuck with the
way it reads to a reasonable person.
If the contract could be understood in more than one way, and
the customer likes his way better, the courts are most likely
to say to you: Hey, you should have written what you
I don't mean here that every interpretation that could possibly
be squeezed out of the contract will get you in trouble, and I
certainly don't mean that you have to worry about commercial
customers who understand very well what paint-ready
I simply mean that if a reasonable person with the same sort of
background as your customer could read your words and come to
the same conclusion as your customer, then you're responsible
for the misunderstanding. Legally, it's your problem.
It's perfectly okay to use a standard form for your
contracts, but be sure to read everything in it very
Different for subs. Just so all
you subs out there know, the rules are a little different for
you. If this situation were to involve a sub, the outcome would
hinge on the local industry's usage of the term "paint-ready."
So, if a dispute occurred and you were a sub, you would bring
in a local person who earns his living painting, and he would
define the term for your side.
Your opponent, of course, might bring in someone else with the
same credentials to say the opposite. We have a term for that
in the legal profession that I can't use in a family
publication, and it's one of the reasons I usually recommend
avoiding litigation and, instead, getting an arbitrator with
experience in the construction industry.
But there's another side to the problem of miscommunication.
Suppose it's not the customer who's confused — it's you.
Perhaps the reason the language in your contract is so
confusing is that you didn't understand the bid documents, or
the architectural plans, or the information about the project
you were given. So you wound up with a contract that you would
have written differently had you realized what was really being
asked of you.
If this confusion costs money or causes delay, whose problem is
that? Yours or your customer's?
That depends on how obvious the confusion should have been to
Patent defect is your problem. If
sitting down and considering the proposal and the construction
documents more carefully would have revealed that there was a
problem, then that's what the law calls a "patent" problem. A
patent problem is your problem, not the customer's. The law's
take on it goes something like this: Next time, pay more
Why wouldn't the hidden-defect clause in the contract protect
you? Because this isn't a defect in the site or the project,
it's confusion in the documents.
Latent defect is someone else's
problem. Now, if the problem in those documents
is something that you, as a reasonable contractor, couldn't
have noticed just by reading the documents more carefully,
that's what's called a "latent" problem, and you can pass those
extra costs along to your customer.
You Can't Be Too Careful
To sum up, I'm essentially saying that while it's okay to use a
standard form for your contract or to copy from an existing
contract, read everything carefully first. Think about how the
language fits each particular job. If you foresee potential
problems, talk to the customer about them and document what is
Explain everything — even the stuff you think any idiot
would understand.author of The Contractor's Plain-English
Legal Guide, has practiced and taught law for more than 25