Why should construction contracts always be in writing?

by | Mar 22, 2018 | Construction Litigation |

In many cases, your contract will not be considered binding unless you write it on paper and both parties sign it. This makes perfect sense because without the contract written down, there can be disagreements between the parties, and no third party — such as a judge or arbitrator — will be able to make a call on which side is correct.

While it’s true that most contractors and businesses never have to look at their contracts again after signing, it’s essential to have the document on hand and available in the case of a serious disagreement. In fact, numerous New York contractors and/or businesses have lost millions of dollars and even gone bankrupt over an unexpected disagreement that could have been avoided if they had signed and dated a physical contract.

It’s because of the physical contracts that “contractors” actually got their names. Imagine, for example, that a contractor agrees to remodel a building for $1,000,000. The contract will dictate the cost, the timing for completion and the parameters for completion. If the contractor fails to meet these guidelines, then the contract could become null and void depending on how it is written. More likely, contingencies within the contract will provide guidelines for discounts to the payer, or other remedies if specific terms of the contract cannot be met. Similarly, if the contractor meets all of the terms, then he or she will have legal recourse — such as placing a mechanic’s lien on the value of the property — if the building owner fails to pay in full.

Are you embroiled in a construction contract dispute? You will need to fully understand the terms of the contract you’ve signed, as well as how it would be viewed by a New York court, to determine your most appropriate course of action.

Source: BobVila.com, “Contracting the Contractors,” Bob Vila, accessed March 16, 2018