Scope of Work | The Most Critical Clauses In A Construction Contract
The scope of work clause in a construction contract is one of the most critical clauses in the construction contract. Some might say it’s the “foundation” of any construction contract. The scope of work is one of the most litigated clauses of a construction contract, thus extra time should be taken when drafting this clause.
The scope of work can and will most likely be modified with change orders. Come back next week to read our article on drafting change orders.
Below are 4 points to consider when drafting a scope of work for your contract:
Clearly define the scope of work to be performed
It is critical that the scope of work clause accurately describes what work you are performing with respect to the construction project. It is critical because you are literally distinguishing the work that you are NOT doing and/or work that must be performed by other contractors.
How To Insure Accurately Describing Your Scope of Work
- Talking with the property owner to understand the scope of work
- Walking the project to get the best understanding of your project
- Having your subcontractors also walk the site and know the site conditions so that they can give an accurate quote for their work
- Prior to submitting your contract to the property owner double- or even triple-check numbers before you submit it to the client.
Plans and Other Documents In The Scope of Work
Outside documents such as plans that the contractor will be utilizing should be included in the scope of work clause. This is because the plans and other documents a contractor is relying help define the contractor’s scope of work. It is important to accurately define plans and other documents. A contractor when describing the plans should include the author of the plans, date of the plans and/or an approval date from a government entity. This is especially important as plans may get modified or revised during the construction. A contractor does not want to be responsible for modified plans that are not in the original scope of the contract.
Finished Fixtures
Another heavily disputed issues the cost and type of finished fixtures in the scope. The contractor must make is clear in the scope of work whether (1) the scope specifically calls for preselected finish fixtures (2) whether there is an allowance and the property owner will be charged for finished fixtures that exceed the amount or (3) the contractors labor is only included in the scope of work and the property owner will have to pay for the finished fixtures in addition to the construction contract price. The best approach is to have the property owner preselect the finished fixtures, approve the finished fixtures in writing. This way there is no dispute as to what finished fixtures will be installed and/or the total price to complete the work.
Learn how to read key contract clauses and other quick tips for avoiding liability.
