Construction Law Today : Construction Lawyer & Attorney : Joshua Glazov : Design Build Contracts, Construction Bankruptcy

No. 2: Price

Price is No. 2 on the list of ten most important construction contract terms. Sometimes you'll see the price called the "contract price" or the "contract sum." To keep it simple today, we'll just keep it as the "price."

The price makes it to No. 2 because it's another of those few things you must have in a construction contract: one side (a prime contractor, subcontractor, sub-subcontractor, etc.) provides the Work (the "working side") in exchange for the other side paying the price (the "paying side").

There's three common ways to price construction work and many issues that affect each. Today we'll talk about each of the three types of pricing and introduce some of the important issues affecting each. At the end we'll also talk about Schedules of Value, an important price breakdown device that helps you keep track of how, when, and where the price is spent as the Work progresses.

• Email This
• Print
• Share Link

No. 1: Identifying the Work

Every construction contract is about building something: the "Work". You can have a construction contract without many of the other nine things on this top ten list, but you can't have one without the Work. That's why identifying the Work tops the list at No.1.

The Work is what the owner pays the prime contractor for, the prime contractor pays their subcontractors for, subcontractors pay their sub-subcontractors for, etc., etc. It's the most important thing one side wants out of the contract. When the contract doesn't identify the Work very well, controversy abounds. At best those controversies stress relationships among the those involved in the project. At worst, as Sir Topham Hatt says, they cause "confusion and delay!" And confusion and delay often lead to claims and disputes.

• Email This
• Print
• Comments (1)
• Share Link