Who’s responsible? Tips for understanding construction contracts

Who’s responsible? Tips for understanding construction contracts

Hopefully, when you get to the end of a building project, everything will have gone smoothly and you’ll be thrilled with the end result. This often happens – in fact, we’d like to say that 99 out of 100 times that’s the result we get. However, there have been some very notable occasions when what the customer wanted and was built did not match – the famous Leaning Tower of Pisa is an obvious example, although at least that has survived through the years! To avoid problems and ensure that where mistakes are made it’s easy to get them fixed by the responsible party, we offer these tips for understanding construction contracts.

1. Make sure you have all of the documentation

We’re going to start with the basics, as these are all too often ignored. Standard contracts often refer to other documents, industry standards, legal requirements or specifications. When reviewing the contract prior to signing, make sure that you have all the information you need, and that key details are included in the contract. 

2. Do you understand what you’re reading?

Construction contracts are written in a blend of technical and legal language which can be very hard for someone outside the industry to understand. If there’s anything you don’t understand, whether that’s language in the contract itself, measurements in the design documents, specifications in the materials orders, it’s vital that you get clarification. Depending on the circumstance, you may want to go back to your contractor for more information; do your own research online; seek a second opinion; consult a lawyer; or all four. Once you’ve signed off on something (whether its a contract or a materials order) that indicates that you’ve accepted the information in it is correct, so if the tiles are the wrong colour (is “majestic cyan” a bright blue or more of a turquoise?) or the kitchen is the wrong shape, you’ll be on the hook to fix it.

3. Liability caps – time and money 

It’s very common for contracts to include a liability cap, both in terms of time and money. For example, if you hire someone to replace your boiler and some pipework today, then if it fails causing damage to other structures in ten or twenty years time it won’t usually be considered their responsibility – even if a mistake was made – as the item will have already had a good run. Likewise, as a boiler is a relatively small component, the installer’s liability might have a financial limit, so if some freak set of circumstances meant that replacing the boiler led to the entire house collapsing, you’d need to rely on your own insurance to take over after a certain point. On larger project, particularly new build houses, it’s essential to understand what the builder is offering in terms of liability (both duration and a financial cap) and repairs and minor fixes required due to settling and so on. And it shouldn’t need to be said, but make sure you have your own insurance to cover major renovation and repair work, as well as new builds, as unexpected issues, from asbestos to subsidence, crop up all the time, particularly in older properties. 

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