As a project owner, a well-drafted construction contract serves
not only as your roadmap for project execution, but also as your
first line of defense – or offense – in case of a
dispute with a contractor.1 Contract provisions can
provide avenues for recourse, shift liability, and preserve key
defenses.
Below are five important provisions that every owner should
prioritize in their construction contracts:
1. Indemnification
An indemnification provision is a contractual promise by one
party (here, the contractor) to protect another party (here, the
owner) from certain liabilities, losses, or claims. An
indemnification provision is typically used to protect the owner
against third-party claims arising out of the contractor's
work, such as property damage, personal injury, or violations of
law. It may also require the contractor to defend the owner when a
covered claim arises, or hold the owner harmless from claims by a
subcontractor.2 Importantly, when
