Friday, July 3, 2015
Short vs. Long Construction Contracts
Pick up a contract for any good-sized commercial or industrial project and you’ll be holding 50 to 100 pages. I’ve never seen a contract for a significant public works project shorter than 50 pages. Even the most popular A.I.A. model contract (A201) is 40 pages.
Why so long? That’s easy. Both sides are trying to avoid surprises – and lawsuits. One-size-fits-all construction contracts pave the way to the courthouse steps. A good contract resolves disputes before they happen. Cover all the issues precisely in your contract. If the unexpected happens, let your contract do the talking.
“OK”, you say. “But I’ve been doing business for years on a 2-pager and never had a problem.” I don’t doubt that. But it’s like driving on bald tires. Not recommended.
I’ll let Ed Stewart of Admiral Construction in Cocoa, FL explain why he uses long contracts:
Years ago, for my 14 hours of continuing ed. for Florida contractors, I took a course on construction law taught by a construction attorney. The attorney asked the class of about 75 contractors, “How many have 2 or more pages in your contract?” Just about all hands went up. Then he said, “As I count up, drop your hand when I get to your number of pages.” At 12, my hand was 2nd to last. At 15, my hand was still up, the only one in the class. He asked me, “How many pages?” I said, "Just finished writing an 18-page contract." The class laughed. Someone shouted "Who in the hell is going to sign an 18-page contract?" The attorney's reply was, "All you guys that have under 10 pages are setting yourself up for a major lawsuit. The contractor that has 18 pages is probably well protected." The attorney asked to see me after class. When class was over, the attorney asked me, “Why so many pages?” I said "Craftsman Contract Writer". He said that was an excellent choice, well worth the purchase price. To date, Contract Writer has saved me many times, although I add more detail to my contracts. Just finished an 18-page contract, and a few weeks before, a 28-pager. So far, I’ve never had a contract turned down for being too long.
Contracts on Steroids
No matter how you feel about short vs. long contracts, include everything state law requires. For home improvement work, a two-page contract you found on the Web is a poor choice. In California, for example, every home improvement contract needs 32 distinct notices and disclosures – a minimum of 14 pages. There’s no (legal) way to avoid that.
Finally, if your contracts are short because you’ve run out of things to say, have a look at Construction Contract Writer. You’ll find dozens of good ways to protect yourself – grouped into 24 categories, from defining scope of the work to completion and final payment. Just answer the questions to write contracts – either short or long – that fit your jobs precisely.