Reading and Understanding Your Building Contract

We've discovered the hard way that the contract your general contractor presents to you can be a means to facilitate your project, or a means to trip you up. When we built our home, our general contractor took a standard AIA contract form and struck out several provisions that would have made it easier for us to protect our rights as the homeowner when it came time to assess the progress on our house, whether he had actually earned his fees, and what portion of his fees was actually due and owing.

Make sure your contract is the instrument you are expecting it to be. Some contractors use a standard contract form and fill in the blanks. Others write their contracts from scratch. Still others will take a standard contract form and doctor it up by striking out provisions which you may need to protect or maintain your rights. Our contractor elected to strike out standard provisions, reduce retention to a minimal level far below standard practice, and in general take advantage of us as novices in the building trades.

You may wind up learning the hard way that you have the wrong kind of contract. Since this is your house, and you could wind up in litigation if your contract does not follow industry standards, getting your contract reviewed by a lawyer is essential. Neglect this step at your peril. It would have been a lot less expensive for us to have our contract reviewed at the outset than it would have been to pay for litigation at the end. In our case, the issues with our general contractor are still in the hands of attorneys. I'd like to say that our case is the exception, but we've found that many people we've talked to have found themselves in litigation for one reason or another. One friend had three different general contractors before he finally gave up and finished his house himself.

Litigation with a general contractor is far more common than any of us would like to believe. Protect yourself with a careful review of your contract.