How To Recognize A Good Contract

Written by bprescottFebruary 1, 2012
Bathroom with black counter and brown walls

Recognizing a Good Contract

A contract may be one page that describes a basic service or installation if you’re hiring a subcontractor, or it may be a lengthy document that outlines in detail a major renovation that a general contractor will perform. NARI recommends that you consult with your attorney or personal advisor whenever you have questions or concerns about a remodeling contract.

A contract is the key document between a homeowner and contractor that connects the job together and verifies that the parties who signed the document share the same vision and scope for the project. The devil is in the details in this case. That fact underscores the importance of taking the time to review a contract before signing it and raising any questions or concerns before- not after- the work begins.

Here are the key details to look for in a bathroom remodeling contract:

  • Contractor's name, address, telephone number, and license information.
  • Homeowner's name, address, telephone number, and the location in the house where the work is scheduled.
  • A detailed account of what the contractor will and will not do, including protecting the area surrounding the bathroom, daily cleanup of the bathroom and surrounding area, and final cleanup when the work is completed.
  • A detailed list of all the materials used in the project, with specifications of the brand name and model number of all products, including the size, color, style, and any other descriptive information.
  • A specification that all the work performed will meet or exceed the building code.
  • Starting and completion dates, work hours, and days that workers can be expected on the job.
  • Financial terms that are clearly spelled out, including the total price, payment schedule, and any cancellation penalty or early completion incentive. A typical payment schedule is divided into thirds: 30 percent as a down payment, 30 percent midway in the project, 30 percent at the completion of the job, and 10 percent when work on the punch list (the list of things that still need to be done or fixed after the project is “finished”) is completed to the satisfaction of the homeowner.
  • A stipulation that your signature is required for approval before work begins.
  • The notice of right of recession, which specifies that a homeowner can cancel a contract within three business days of signing it.
  • Procedures for change orders during the course of the project. A change order that includes the cost of the modification should be written and signed by all parties before the new work begins and any time delays occur that will affect the overall timetable for the work progress. Use a change order in the following situations:
  • If you change your mind about a design or product
  • If the contractor recommends changing some aspect of the design
  • If a change is required because of an unexpected situation, such as a broken pipe or termite damage
  • If a code violation affects the project
  • A binding arbitration clause that enables both parties to resolve a dispute quickly and effectively without costly litigation if a disagreement occurs.
  • A warranty covering materials and workmanship for a minimum of a year. This warranty should be identified as either full or limited, with an explanation of these terms. A full warranty means a faulty product must be repaired or replaced or the homeowner's money returned. A limited warranty indicates that replacements and refunds of damaged products are limited in that regard. The warranty must identify the name and address of the party who will honor the warranty and must also specify the time period for the warranty.
  • Assurances that you won’t be liable for any third-party claims for nonpayment of materials or subcontractors. A contractor's Affidavit of Final Release or Waiver of Mechanic's Lien Rights from the general contractor, the subcontractors, and suppliers, should be provided as a claim for money owed.

 

From ‘Bathroom Remodeling For Dummies’
Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana
Used by arrangement with John Wiley & Sons, Inc.

 

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