Construction Contract Questions Answered

Scope of work with trade-specific detail, payment terms with retainage provisions, lien waiver requirements, insurance and indemnification, warranty obligations, change order procedures, and dispute resolution. Co-Founder Conor Meyers, as CEO of ACE Building Envelope Design, drafts these from direct operational experience.

Change orders modify the original contract scope, price, or timeline. Effective provisions define who can authorize changes, required documentation, pricing methodology, and timeline for approval. The AGC reports change order disputes are the most common source of construction litigation.

Retainage is a percentage of each progress payment withheld until project completion, typically 5% to 10%. It incentivizes completion and provides a fund for defect remediation. Release conditions should be clearly defined in the contract.

Lien waivers are documents exchanged at each payment confirming the payee waives lien rights for the amount received. Conditional waivers (effective upon payment clearing) protect subcontractors; unconditional waivers protect owners and GCs.

Performance bonds are typically required on public projects and larger private projects. They guarantee the contractor will complete work per specifications. The bond surety pays for completion if the contractor defaults.

Mandatory mediation followed by binding arbitration typically produces faster, less expensive outcomes than litigation. Our dispute resolution guide covers the full spectrum of options.

Mechanic's liens protect unpaid contractors and suppliers. Idaho has strict filing deadlines and procedural requirements. See our dedicated guide: Mechanic's Liens in Idaho.

General liability, workers' compensation, auto liability, umbrella/excess, and builder's risk (for new construction). Certificate of insurance requirements and additional insured endorsements should be clearly specified.