| Building Your Dream Theater: Step 2 - Homeowner's Guide to Construction Contracts |
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| Home Theater Feature Articles Other | |||||||||||||
| Written by Brian Kahn | |||||||||||||
| Monday, 01 August 2005 | |||||||||||||
Page 3 of 3
Scheduling and Timing Most contracts call for progress payments during the course of construction. The payment milestones and amounts should be clearly set forth in the contract documents. Progressive payments protect both the homeowner and installer. The installer is never out of pocket too much and the homeowner gets to make sure the work is being done properly before paying for it. Retention clauses should be considered when a certain amount, usually 10 percent of the progress payment that is actually earned, is held by the owner until the end of the job. This gives the owner some bargaining power when the job is completed to ensure that the contractor completely finishes all the miscellaneous or punch list items at the end of the project. To protect the contractor, a reasonable time limit should be set for payment of this final retention.
Problems After the Install?
Conclusion
3.26 Copyright (C) 2008 Compojoom.com / Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."Like this article? Bookmark and share with any of the sites below.        |
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Timing is always a critical issue with construction. The contract
should include a construction schedule and a mechanism for adjustments,
along with a promised completion date or duration of construction.
There are many ways to encourage contractors to stay on schedule,
including performance bonuses for early completion, liquidated damage
clauses (a fee per day for late completion) and a savings-splitting
clause, which can apply to both time and money savings.
Savings-splitting and performance bonus clauses can reward a contractor
for performing on or ahead of schedule and for saving you money. 
After the project is completed, you may find something wrong with the
contractor’s work and need an avenue for recourse. Traditional
litigation in our court system is very expensive. A “simple”
construction defect trial can cost $50,000 or more. Important options
to consider in reducing the expense and risk are attorneys’ fee
provisions, which allow the winning party to recover fees, and the use
of alternative dispute resolution venues. Alternative dispute
resolution typically consists of either mediation or arbitration and
usually proceeds more quickly and can cost much less than litigation.
The contract can govern whether alternative dispute resolution is
required prior to litigation or even if it is to be binding in place of
litigation. Certain rights are forfeited in exchange for faster and
less expensive resolution, including jury trial and appeals, so this
choice should be made carefully and in conjunction with the advice of
an attorney.
