Construction Contract Provision

Contact Clauses

It is beyond the scope of any article or book to attempt a complete discussion of the meanings, significance, and legal implications of all contract clauses. Nevertheless, the most significant aspects of some of the principal contract provisions encountered in the practice of construction contracting are discussed under topical headings in this article. The following sections consists of contract clauses of special importance are not treated elsewhere in this article.

Construction contracts can and frequently do include provisions pertaining to specified liabilities, waivers, damages, responsibilities, requirements, and other disclaimers that are designed to protect the owner and/or the architect-engineer by transferring risk and uncertainty to the contractor. While it is true that there are limits to the administration of some of these types of contract provisions by the courts, the contractor cannot assume that such contract language will be administrable . Such vindicated language has at times been invalidated by the courts where there was differences by the owner with the contractor's work or a failure on the part of the owner to act in some essential manner.

However, the contractor cannot assume that such severe and seemingly unfair contract language will uncertainty with regard to whether or not he fully understands the language and its implications, the contractor should straight away seek the assistance of his attorney. This should be mastered before the contractor makes any binding promises having to do with the bid documents or contract documents. The contractor's failure to do so can result in serious complexity that often could have been avoided had legal advice been obtained.

Rights and Responsibilities of the Owner

Construction contracts typically reserve a number of rights to the owner of the project. These rights will almost always be distinctly set forth in the contract documents, usually in a special section of the general conditions titled "Rights and Responsibilities of the Owner."

Depending on the type of contract and its specific wording, the owner may be allowed to award other contracts in connection with the jobs, to require contract bonds from the contractor, to approve the surety to put forward by the contractor, to retain a specified portion of the contractor's repeated payments, to make changes in the work, to carry out portions of the work in case of contractor non-payment or neglect, to withhold payments from the contractor for adequate reason, and to terminate the contract for cause. The right of the owner to look over the work or job as it proceeds, to direct the contractor to expedite the work, to use completed portions of the project before project completion and contract dissolved, and to make payment deductions for uncompleted or faulty work are common construction contract provisions. The owner is normally free to perform construction or operations at the site with its own forces or with separate contractors, as well.