Language to include in contracts

It is important for construction companies in Pennsylvania to take care when they draft their contracts and to review all proposed contracts with which they are presented. The language in a contract can be used to help companies reduce their risks.

Developers and owners should include provisions in their agreements that require contractors to engage in competitive bidding processes for their subcontracted work. This helps them to ensure that the subcontracted work is being performed at competitive prices. A good way for businesses to keep the project costs in check is to include what the allowed labor rates are. This can help companies to figure out what the basis is for labor charges.

It is also important to set caps on the equipment costs from the start of a project. This can help to protect the businesses from overruns that are unexpected. Reporting requirements for change orders should also be included in the contracts. These might include provisions about unit pricing or agreements that the change orders will need to have itemized lists submitted with them to back up the costs. Finally, it is a good idea for companies to include the right to audit and accounting provisions.

By carefully drafting contracts and including provisions with thoughtful considerations, developers and owners may help to protect themselves and mitigate the risks involved. Consulting with experienced business and commercial law attorneys might be beneficial to construction companies so that they might have contracts that might protect their interests better. Well-drafted contracts may help businesses to avoid costly litigation. If a dispute does arise, the attorneys may be able to negotiate fair settlements for their clients so that both parties can continue performing their duties.

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