Planning For Construction Success

Key Contractual Considerations for Owners

Regardless of project size or scope, a comprehensive and tailor-made written construction contract provides the foundation for success. At a project's outset, it is also imperative that owners understand their contractual rights, duties, and obligations, particularly when using a standard form contract. While the negotiation of any construction contract will involve the consideration of numerous factors and potential contract provisions, the following provides an example of several key factors, which, if carefully considered, will allow an owner to mitigate its risk of cost overruns and delays. 

Fixed-Price vs. Cost-Plus Contracts

Selecting the appropriate payment model is a critical first step, with the majority of commercial and residential projects typically priced on either a lump-sum or cost-plus basis. While unit prices are also commonly used on certain types of projects that can be broken down into units (e.g.,