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Scheduling and Timing
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.
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
Problems After the Install?
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
It is likely a good idea to hire or at least consult with a lawyer when
making major changes to your home or even your home theater, especially
as home theater and especially home automation systems get bigger and
bigger in terms of scope and price. With the tips listed above, you
have an outline of some of the key elements you should understand
before you enter into an agreement to have some major work done on your
system and/or on your home. While some of the steps may seem overly
cautious or even paranoid, they are designed to protect both you and
your contractor from any problems. Your home theater should be the
jewel of your home and, with the right steps to insure your success, it
can be painless to purchase and have installed.
D. Kahn is a partner in the Law Offices of Linda L. Northrup, A P.C.
The firm, with offices in Los Angeles and Westlake Village, California,
has been focusing on the areas of real estate and construction law