Many people tend to handle small projects casually, verbally appointing a contractor to implement some drawing that was probably developed by an architectural intern. This is quite common in small residential projects where “I know a fundi” is a common phenomenon.
Usually, the owner of the project hires a contractor who has been referred to them by a friend. This contractor is tasked with doing everything on the project. No papers are signed, estimates are handwritten on a piece of paper and timelines are agreed on verbally. After all, it’s a small 3-bedroom house. What can possibly go wrong?
Well, a lot.
Even on a small construction project, disagreements can develop over the cost, time, or scope of the work. Small disputes can grow into major conflicts. Having a written agreement clearly setting out the parties’ expectations will reduce the chances that such disagreements turn into costly disputes.
Common causes of disputes are delays in payment, delays in delivery of project, variations resulting from increased costs of materials and other extraneous factors, design changes and many more.
With a written contract, each party knows clearly what is expected of them and when. Any changes are recorded and mutually agreed on. In the event of a disagreement, it is already stipulated clearly how it will be escalated.
Five Critical Clauses in a Contract
When you do the contract, ensure it clearly spells out:
Scope of the work
It must be stated clearly what the contractor is supposed to accomplish
Timelines
Expected duration of the project must be stated. The contractor will commit to certain timelines and adhere to them unless stated adversarial occurrences take place during the execution.
Payment
This must be agreed on and no surprise bills should be introduced along the way unless expressly agreed on.
Payment may consist of deposit, milestone payments and final instalment upon successful completion of the project.
Termination
You ought to agree on circumstances under which the contract may be terminated by either party.
Dispute Resolution
Disputes are common in many projects but they need not result in termination. You need to agree on a mechanism of resolution. This would in most cases require a professional arbitrator whose verdict will be final. Disputes can also be escalated to courts of law.
