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A construction contract is the operating plan for your project, not just a price and a signature page. Before signing, check that it clearly defines the work, payment triggers, change-order approval, schedule, quality and completion standards, insurance and licensing evidence, and the steps for handling defaults and disputes. If any of those are vague or missing, ask for the agreement to be clarified in writing before work begins. The legal rules depend on your project’s location and whether it is residential or commercial, so treat this checklist as a review aid—not a substitute for local advice.
What should I look for in a construction contract before signing?
Read the agreement as a connected set of documents. The contract, plans, specifications, allowances, exclusions, schedules, and any referenced attachments should describe the same project and allocate responsibility clearly. A low headline price does not make up for an incomplete scope, unclear payment terms, or an agreement that lets costs and deadlines shift without your approval.
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Start by confirming the project’s jurisdiction and type. The Utah Department of Commerce’s residential construction contract guidance and sample are useful owner-facing examples, but they are not a universal form. Texas lien-law provisions, Oregon construction statutes, and Philippine CIAP contract guidance illustrate that rights, procedures, and deadlines differ by jurisdiction. Do not carry a deadline or remedy from one example into a contract governed by another place’s law.
Use the following review sequence. For each issue, ask what the contract says, what document supports it, and what happens if the parties disagree. If the answer depends on a conversation, an assumption, or a promise that is absent from the signed documents, get the agreement revised before signing.
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Does the written scope match what I expect to receive?
The scope should tell you what the contractor will build, what is excluded, and which documents govern the work. Vague phrases such as “complete renovation” or “standard materials” leave room for different interpretations; plans, specifications, named materials, and defined responsibilities make expectations easier to verify.
Check that the contract identifies or attaches the relevant plans and specifications, and that it addresses allowances, owner-supplied items, and exclusions. For example, if you are supplying an appliance, fixture, or finish, establish who orders it, when it must arrive, who checks it, and who is responsible for installation if that responsibility matters to the job. Do not assume that an item shown in a drawing is included in the price if the written scope or an exclusion says otherwise.
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Look for a rule that resolves conflicts or omissions among the contract documents. If a plan, specification, proposal, and contract term appear inconsistent, the agreement should explain which controls or how the parties will settle the discrepancy. The Utah sample expects construction to follow the plans and applicable requirements and treats an agreed change as an addition to the original agreement; it is a helpful example of why the documents and change process need to fit together.
- Red flag: The contractor relies on informal promises, or the proposal leaves out important work you assumed was included.
- Ask for: A complete written scope, identified attachments, a list of exclusions and allowances, and a clear process for resolving conflicts.
Are payment requests tied to work I can verify?
Each payment should have an understandable trigger and supporting paperwork. Before signing, identify what work or milestone earns each payment, what evidence accompanies an invoice, how disputed amounts are handled, and whether any amount is retained until later work or closeout.
Compare the payment schedule with the actual sequence of work. A payment schedule that is substantially front-loaded or detached from completed, verifiable work can leave you paying ahead of progress. Ask what you will be able to observe or document when each installment becomes due. The contract should also explain the process for submitting and reviewing payment requests rather than leaving the timing and evidence to informal agreement.
Payment, progress-payment, and retainage rules can be set by local law. Oregon’s construction statutes address progress payments and retainage; Texas’s Property Code Chapter 53 includes lien-law and owner information or disbursement provisions in relevant circumstances. Those sources are examples of jurisdiction-specific rules, not terms to copy into another project’s contract. Confirm the law that applies to your project before relying on a particular deadline, withholding right, or payment procedure.
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- Red flag: Payment is due by date alone, without a defined work milestone or supporting documentation.
- Ask for: A written schedule of payment triggers, the records required with each request, and a procedure for disputed amounts and any retainage.
What should a change-order clause say?
A change order should document the changed work, its price, and its effect on the schedule before the contractor proceeds, except for a genuine emergency addressed by the contract. It should also say who is authorized to approve changes; a site conversation should not silently become permission to incur an open-ended extra charge.
The Utah Department of Commerce states in its sample guidance: “Before proceeding, unless it’s an emergency for safety or property damage, the contractor must give you a written estimate of the cost and time impact of the change.” Its guidance also describes an agreed change order as documenting the change, additional cost, and any extension of substantial completion. The key practical protections are written documentation, a price, a schedule impact, and clear approval authority.
Review the clause for what happens if a change is proposed but not approved. Can the contractor pause the affected work? Does the rest of the project continue? How are urgent safety or property-protection situations documented afterward? The agreement should answer these questions rather than leaving either party to guess.
- Red flag: The contractor can charge for extras without a written description, price, and time impact, or it is unclear who can approve them.
- Ask for: A written change-order form or equivalent process, named approval authority, and a rule for emergency changes.
Is there a credible schedule and a clear definition of completion?
A contract should identify meaningful schedule milestones and explain how completion is judged. A single estimated finish date is less useful if the agreement does not define inspections, acceptance, correction of defects, and the closeout items needed to finish the job.
Check whether the schedule identifies stages that matter to you, and whether it explains how approved changes affect the completion date. The contract should also state how the parties document progress or a delay and what notice is required when timing changes. Avoid assuming that a particular delay remedy or deadline is automatic; the agreement and local law determine the available process.
Completion should not be left to an undefined phrase such as “substantially finished” without an explanation of inspection, acceptance, remaining work, and defect correction. Ask what happens when an inspection identifies a problem, how the contractor will be notified, how corrections are tracked, and what closeout documentation is expected. The CIAP’s Document 102 contract guidance illustrates that defects and termination provisions are part of a specific contract framework—not universal default terms.
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- Red flag: There is no credible schedule, inspection and acceptance process, defect-correction method, or documented closeout.
- Ask for: Milestones, a process to address schedule changes, inspection steps, a written correction process, and a closeout checklist appropriate to the project.
Are licensing, insurance, permits, and compliance responsibilities clear?
Confirm the contractor’s credentials through the authority relevant to the project’s location, and ask for current insurance evidence. The agreement should also make clear who is responsible for permits, approvals, and compliance steps that apply to the work.
Requirements differ by jurisdiction and project type. Utah’s owner-oriented guidance says a contractor must be licensed there and discusses general liability coverage, workers’ compensation where required, and proof that shows limits, coverages, and exclusions. Use the relevant licensing authority and insurance documents for your own location; Utah’s example does not establish what another jurisdiction requires.
Do not treat a generic statement that the contractor is “insured” as a substitute for evidence. Ask for documents that identify the coverage and its limits, and clarify whether the contract assigns responsibility for obtaining permits and approvals. If a responsibility is not assigned, resolve that ambiguity before signing.
- Red flag: Required license or insurance evidence is missing, or nobody is clearly responsible for permits and approvals.
- Ask for: Current, locally relevant credential and insurance documentation, plus a written allocation of compliance responsibilities.
How can I reduce the risk of unpaid subcontractors or suppliers?
Understand who will be paid from each payment request and what lien waivers or releases the contractor expects. The contract should establish the forms and payment conditions in advance; do not sign an unconditional release for money you have not received.
Texas law offers a jurisdiction-specific example: in relevant circumstances, it addresses a preconstruction list of subcontractors and suppliers and a disbursement statement with payment requests. Those requirements should not be treated as universal. Ask how your contract will identify the parties being paid, what records accompany a request, and what proof of payment or release will be supplied.
The AGC-hosted ConsensusDocs guidebook recommends specifying waiver forms before signing and conditioning waivers on payment, with treatment for retainage and claims described in the form. It is industry guidance, not a statute. Because lien rights and waiver rules vary, have the actual form and process reviewed under the law governing your project, especially before signing a document that releases rights.
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- Red flag: A waiver is demanded without a clear form, payment condition, or explanation of the funds it covers.
- Ask for: The waiver form before signing the contract, a clear connection to payments actually received, and a process for identifying subcontractors and suppliers.
What happens if work stops, a party defaults, or a dispute arises?
The agreement should explain how a problem is raised, how much notice is required, whether the other party has an opportunity to cure, and when suspension or termination is allowed. It should also make dispute steps understandable before a disagreement occurs.
Read every notice, cure, suspension, and termination clause. Check where notices must be sent, what they must include, and what happens if the stated problem is not corrected. Do not assume the same cure period or termination right applies everywhere: Utah’s sample uses its own written-notice and cure procedures, while CIAP guidance describes a different framework.
Pay particular attention to mandatory arbitration, venue, governing law, and attorney-fee provisions. These terms can affect where and how a dispute is handled and who may bear certain costs. If you do not understand a clause, get an explanation or local legal review before signing rather than waiting until a dispute has started.
- Red flag: The contract has no understandable notice, cure, or termination process, or imposes a dispute forum or fee rule you did not expect.
- Ask for: Plainly stated procedures, delivery methods, deadlines, and a clear explanation of governing law and dispute resolution.
How should I compare two construction contracts?
Compare certainty and risk, not just the bottom-line price. A bid with a lower headline number may omit work, leave allowances undefined, or place more cost and schedule uncertainty on you.
Review both agreements against the same questions: Is the scope complete? Are price and payment triggers understandable? Are changes controlled? Is the schedule credible and are delays addressed? Are credentials, insurance, and subcontractor-payment safeguards covered? Are inspection, defect correction, and closeout defined? Can you understand termination, dispute procedures, and governing law?
Make a written list of differences and ask each contractor to clarify them in the contract documents. A verbal assurance that two bids “include the same thing” is not enough if the written exclusions, allowances, or payment terms differ. Do not treat a missing provision in one bid as a benefit; it may instead leave a question unanswered.
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What should I do if I find a red flag?
Pause before signing and ask for a specific written revision or supporting document. Keep the request focused on the uncertainty: what is included, what evidence triggers payment, who approves changes, or how a dispute is handled.
- Mark the clause or missing attachment. Identify the exact language, drawing, schedule, or document that needs clarification.
- Ask for a written answer. Request revised contract language or an incorporated attachment, not just a verbal explanation.
- Check consistency. Confirm the revision agrees with the proposal, plans, specifications, exclusions, and payment schedule.
- Verify local requirements. Use the relevant licensing authority and local legal guidance for questions about lien waivers, payment rights, mandatory terms, or deadlines.
- Do not sign unresolved terms. If a clause about payment, insurance, indemnity, termination, lien rights, or arbitration is material and unclear, consider asking a local construction attorney or owner-side contract reviewer to examine it.
Keep dated records of decisions and project communications after signing, but do not confuse recordkeeping with contract approval. A note or project log can help preserve context; it does not replace the signed change-order process the agreement requires.
Frequently Asked Questions
Can a contractor start work before the contract is fully signed?
Whether work can lawfully begin depends on the governing law and the parties’ documents, so do not assume that an unsigned draft protects either side. Ask for the final executed agreement and required attachments before authorizing work or making a payment.
What if my contractor says a verbal promise is part of the deal?
Ask to add the promise to the written scope or an incorporated attachment before signing. If a later disagreement arises, relying on an informal conversation can make it harder to establish what the parties agreed to, and the contract may specify how changes must be approved.
Should I ask a lawyer to review every construction contract?
The need depends on the project’s size, complexity, and risk allocation. Local legal review is especially useful when the agreement includes lien waivers, unusual payment provisions, indemnity or insurance obligations, termination restrictions, arbitration, or unfamiliar fee and venue terms.
Can I use a contract sample from another state or country?
Use another jurisdiction’s sample only as a prompt for questions, not as a ready-to-sign form. The Utah, Texas, Oregon, and Philippine sources cited here demonstrate that legal rules and contract procedures can differ substantially by location and project type.
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