Using Contracts & Contract Verbiage in New Pole Barn Sales
When you come across a new customer for your post-frame construction company, you’re basically starting a new relationship. You don’t know the other party and they don’t know you, so you have to ensure your provider-client relationship is a healthy, long-lasting one. Creating a contract you can enforce is a great way to start. It will provide protection for all parties involved in case anything goes wrong.
Having every clause on paper is essential to avoid unnecessary conflict in the long run. One of the biggest issues with non-written contracts is that you must rely on each party’s memory of the agreement over time. If a dispute arises, this may be problematic, especially when there are large sums of money at stake. Using written building contracts that incorporate the correct verbiage is essential.
What Are Building Contracts?
A contract, by definition, is a legally binding agreement that outlines the rights and obligations between two or more parties. In construction, contracts are a necessary element of any new contractor-customer relationship for numerous reasons. They detail the contractor’s scope of work, their fees, and any relevant work orders.
A robust contract for a pole barn construction project should be as specific as possible in delimiting the actual extent of the project. This will prevent any future confusion and leave no room for interpretation on either side. You’ll typically need to attach other documents to help describe such details accurately. Make sure your building contract defines:
- The estimated project timeline
- The payment terms
- The costs of labor and materials
- The responsibilities of each party involved
- Subcontractor details
If your project is bound to take a while (typically a year or longer), make sure to include the pertinent escalation clauses as well. They will protect the contractor and the project owner in case prices change on certain materials, ensuring the understanding of all parties involved in case an increase in the project’s final cost is necessary. The most common grounds for adding escalation clauses in building contracts are the use of asphalt, steel, or fuel in a project.
Types of Building Contracts
Not all construction contracts are built the same. The details in these documents depend on many factors. The four main categories into which contracts in this industry are classified are:
- Fixed price — which, as the name states, include a set price for all services provided by a contractor
- Unit price — which determine costs per a specific measurement unit
- Time and materials — which establish the price at a pre-negotiated rate based on labor and supplies
- Cost-plus — which obligate the client to pay the actual cost of all construction expenses in addition to a percentage of the total cost of the project
A Quick Guide To Contract Verbiage
Incorporating everyday terms into a contract may be distracting. The best way to ensure clarity is to use the proper contract verbiage to refer to certain elements within the clauses. Some of the most common terms you’ll find in contracts in the construction industry are:
- General contractor — The party responsible for overseeing the project
- Owner — The party hiring the general contractor
- Job site — The address or description of the physical location where all construction work will take place
- License number — The number assigned by the licensing board to the general contractor to indicate their legal ability to work
- Description of work — An outline specifying the range of work planned for the project
- Price and payments — The agreed-upon cost of the work
- Labor and materials — The assignation of responsibilities regarding materials and work operations required to complete the project
- Timeline — The estimated start and end dates
- Permits and licensing — The designation of the party responsible for requesting and obtaining any necessary permits and licensing for the project
- Change requests — The establishment of how, when, and at what cost any requested changes will be communicated to the general contractor
Protect Yourself & The Project With a Contract
To establish a healthier relationship with your clients and protect everyone involved in case of a dispute, a written contract is necessary. Once you’re all set with your contract, you can start prepping your project. If you need supplies for your pole barn business, visit our site and explore the Burrow’s Post Frame Supply catalog today.Back To Blog