A construction contract is a formal agreement between two or more than two parties regarding the construction of a site or place. Such contracts are made between construction companies and the owners of the site which has to undergo construction. These contracts are one of the most important kinds of contracts that are there and have a detailed specific nature. Any construction contract can be made verbally but it is always preferred that such a contract is written in nature so that it can be used for reference purpose in the future of the contract term and also prove to be helpful in the case of violation of the terms for a legal body to use it as a proof.
Construction contracts consist of many detailed parts. The first major point to be mentioned in any such contract is the effective date when the contract comes into force. This is followed by the length of the contract and the termination date on which the contract ends or terminates in legal terms. The names, addresses, contact numbers and titles given to the involved parties form the next major section of a construction contract. Another section is reserved to lay down the details of the type of construction and the materials and machinery used for it. Any construction contract must also contain the financial details or the details of the money involved.
When we say that a construction contract is legally binding, we mean that the terms and conditions which are mentioned in it must be obligatory for the parties to follow. These terms and conditions are related to the duties and responsibilities of the parties and the points which include ‘dos and don’ts’ for the involved parties. A construction contract is breached when a party fails to follow or abide by any of the one term of the contract. This is resolved by the involvement of the legal body governing construction contracts.