No matter how well a contract may be legally written, it is incomplete without specific information. This information, and most importantly the specification described in Building Specifications must be put into the contract by the parties concerned, as well as building plans.
The specification and drawings must be annexed to the contract, a clear description of what must be done and the materials and services to be used.
The contract amount that will be paid at predetermined and agreed intervals.
The contract period – a contract must allow for extension and should have a penalty clause. It is a good idea to employ the services of a lawyer to at least check the contract before signing. The legal fees compared to the average contract amount are negligible.
Although contracts will vary in content, the following should be included in a building contract:
- Full names and addresses of the parties. The addresses will be the domicillium citandi et executandi, being the address the parties have chosen where all notices of processes arising out of the contract may validly be delivered.
- Specification – annexed to the contract.
- Working drawings and schedules – annexed to the contract. The drawings should be approved by the local authority.
- The contract amount and a schedule of how and when this amount will be paid if a deposit is payable, this should also be included in the contract document.
- Prime costs amounts – sums of money provided in the contract documents for materials and goods to be obtained from a supplier and to be fixed/installed by the contractor.
- Provisional amounts – sums of money provided for nominated sub-contractors, selected sub-contract amounts, budgetary allowance or any other monetary provisions.
- Extraordinary costs payable – must be listed and the party responsible for the payment stated. For example, connect fees and plan approval costs.
- Commencement and completion dates – the duration of a contract would usually exclude the December holiday period which is traditionally the builders holiday period.