Top Ten Clauses to Have in Your Contract-The Homeowner

The interesting thing about the contract from the homeowner's viewpoint is that many of the same clauses that I listed yesterday are just as important for the homeowner. For example, #1 is exactly the same:

1. ALL CHANGE ORDERS MUST BE IN WRITING AND INITIALED BY BOTH THE HOMEOWNER AND THE CONTRACTOR! Should I say it again? The change orders should spell out any change in the contract price and include information about whether the completion date will be affected.

2. The contract should clearly spell out the price for the job along with a clear cut payment schedule and a list of which aspects of the work must be completed before payment is made.

3. The contractor should indicate how often he will be at the job and who has authority to authorize changes orders. The homeowner should ask for that person's cell phone number and/or e-mail address.

4. There should be a complete description of the scope of the work and the materials to be used.

5. The homeowner should include a provision that will allow him or her to collect attorney's fees if he has to bring an action against the contractor for breach of contract.

6. The homeowner should include a clause about what constitutes breach of the contract and what the remedy will be if the contractor breaches.

7. Warranties should be clearly spelled out and include the items that are not covered as well as covered items.

8. The homeowner should decide whether he wants to include a mediation and/or arbitration clause in the contract.

9. The contract should include a detailed description of what constitutes punch list items and how to determine when the punch list is complete in order for final payment to be made.

10. The contract should clearly define unreasonable delay and what the penalties will be for finishing beyond the date of substantial completion. It should also indicate what will occur if the work fails inspection, is in violation of the building code, or is deemed substandard by a third-party inspector.

Remember, the best protection for the homeowner and for the contractor is a contract that clearly spells out how the job is going to work, and what will happen if problems arise.

Happy 2008 everyone!