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Importance of contracts in the construction industry

Contracts have always been important in construction projects as they lay down all the duties and obligations, and rights and liabilities of the parties.

A Construction Contract Agreement is a written document that contains everything that is agreed by the parties ensuring that all participants have a common understanding regarding the precise nature of the work involved and their responsibilities.

All parties to the contracts should ensure that their requirements about important aspects of the project are included in the contract. It’s a useful tool that can save both the client and contractor a lot of time, money, and unnecessary stress.
Understanding both technicalities and the law is important while drafting and managing the contract.

The contract will set out the terms for:

  1. Accountability for the parties for the work to be done and how compensation will be handled related to the project.
  2. Agreement about when the work is to be completed
  3. The contract can outline a workable pay schedule
  4. The desired quality of the work can be better achieved through the contractual clauses in the contract
  5. If a dispute occurs between the parties, then the dispute resolution clause in the contract can protect both the parties by a pre-decided method of dispute resolution
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