What should be in a contract?
One of the best ways to avoid construction disputes is negotiate and follow a well-written construction contract. Well-written construction contracts often include the following:
- Full name and CCB license number of the general contractor as it appears on this site. Verify that the contractor is licensed, and check the history.
- Full name of the owner, the job address and contact information such as phone numbers.
- A detailed description of the scope of construction work.
- List of specific building materials to be used in the project.
- Start and completion dates.
- Total price of the project, including labor and materials, and a payment schedule.
- List of allowance items (lighting, fixtures, plumbing fixtures, appliances, etc.) and the budgeted amount, if any.
- List of required permits, including who will be responsible for obtaining them.
- Agreement that any changes to the contract will only be done upon written “change orders” signed by both the contractor and the homeowner.
- Signature of both parties to the contract.
Keep a signed copy of your contract, and all related materials in a safe place. All consumer protection notices should be read, understood, and maintained with your contract documents.
Construction contracts often contain arbitration clauses. Arbitration clauses spell out how the parties will resolve their differences if things don't work out. Arbitration is a way to settle disputes outside, or instead of, a lawsuit.
Before signing a contract with an arbitration clause, understand:
- Who will arbitrate
- What arbitration might cost
- What rules the parties will use if they must arbitrate their dispute
Because your construction contract may represent the single biggest purchase you and your family ever make, you may want your own lawyer to review your contract before you sign.
Homeowners’ right to cancel
One-day right to cancel
A property owner can cancel any initial contract for construction, improvement, or repair of a residential structure by giving the contractor a written notice of cancellation prior to midnight of the next business day. Some exceptions apply such as work already substantially begun.
The contractor does not have any notice requirements. (ORS 701.310.)
Three-day right to cancel
Buyers have a three-day right to cancel a home solicitation contract when the contract is solicited at any place that is not the seller’s permanent place of business.
A construction contract is subject to this law if there is a personal solicitation made by the contractor or the contractor’s agent and the contractor’s offer is accepted anywhere other than the contractor’s permanent place of business. For example, you meet with a contractor in a restaurant. This applies to contracts for remodeling or repairs, not construction of a new house.
Regardless of who initiates the contact, the property owner must be given notice of his or her right to rescind the contract. (ORS 83.720.)