A well-rounded construction contract should include a scope of work clause. Without these provisions, disputes could arise during the construction project regarding exactly what services will be provided and when, and how the party completing the services will be compensated.
Disputes like these can derail a construction project, leading to costly and time-consuming efforts to resolve the dispute. It could even lead to litigation—something both parties to a contract likely want to avoid.
A solid scope of work clause in a construction contract can help both parties understand exactly what is expected of them, which can reduce misunderstandings that lead to disputes.
What does a scope of work clause cover?
The scope of work outlines the details of what is expected from the party performing the service and how they will be compensated. The party performing services could be a general contractor or a subcontractor.
The following five provisions are often included in a construction contract’s scope of work clause.
The scope of work clause often contains definitions of any specialized terms or abbreviations in clear language. This way, both parties understand and agree on what the language in the contract means.
The scope of work clause often contains a detailed overview of the project itself. This includes which activities are necessary for the project’s completion.
Following that, the scope of work clause often explains what goals must be met and the timeframe in which they must be completed. This helps the party providing services understand what is required of them.
Similarly, there is often a detailed section in the scope of work clause on what activities the party performing services will undertake and when. These specificities help avoid misunderstandings on what tasks the party performing services is committed to completing.
A scope of work clause also often includes provisions on how administrative tasks will be handled, such as who will handle change orders and how the party performing services will be paid and when.
A scope of work clause can prevent miscommunications
Many construction disputes boil down to misunderstandings. The project owner may think the general contractor will perform services that the general contractor has no intention of performing. A general contractor and subcontractor may have two different understandings of how payment transactions will be made and when.
Misunderstandings such as this can derail a construction project. A scope of work clause in a construction contract can help parties ensure they are on the same page regarding the services provided and compensation paid.