Experienced. Dedicated. Result-Driven.

  1. Home
  2.  • 
  3. Construction Litigation
  4.  • Lump-sum contracts lay out obligations up front

Lump-sum contracts lay out obligations up front

If you are a construction developer who is planning a project, one of the first things you must decide is whether you want to use a contractor to perform the building tasks. If you should decide to enlist the services of a contractor, then you will need to create a contract covering the terms of the project. In this post we will look at the most common type of written agreement used by developers and contractors, which is the lump-sum contract.

In a lump-sum agreement, the amount that the contractor will receive is decided at the outset. Typically, a lump-sum contract designates dates that specific parts of the project are due for completion. The contract also contains stipulations regarding the times at which the developer will be issued his or her payment installments.

A lump-sum contract obligates a contractor to do any work that “is reasonably inferable” as being necessary to complete the job correctly. Also, the only way changes can be made regarding a contractor’s duties is if the changes are in accordance with conditions cited in the contract.

What is mentioned in this post are only the most basic elements of a lump-sum contract. But the key concept is that to avoid disputes as the project progresses, it’s important that the contract is clear and concise and that both parties fully understand what their rights and obligations are.

As such, if you are a developer or a contractor who is in negotiations to work on a project, you may wish to have an experienced construction litigation attorney help you go over the terms of the proposed contract. The attorney could help ensure that the agreement you sign will yield the desired results.

Unfortunately, sometimes disputes between developers and contractors can arise for any number of reasons. If you are dissatisfied with the conduct of a party with whom you have an agreement, a construction litigation attorney may be able to help you get a desirable outcome.


Source: Construction litigation, dispute with a developer, contractor dispute