April 06, 2022
Author: Lorman Education
A valid construction contract must adhere to the various elements required of all legally binding agreements. In terms of the construction industry, the typical parties of a contract are a contractor and buyer.
According to Wald & Associates, there are six requirements for a contract to be valid.
1. The agreement consists of an offer and an acceptance of an offer.
2. Something must be bargained for in exchange for a promise.
3. All parties must have the legal ability and capacity to be held to a contract.
4. Both parties must agree to the terms of the contract.
5. Subject of bartering must be legal.
6. The contract must be written out to be properly enforced.
A contractor and purchaser should consider recording every significant decision in writing. For example, a letter of intent is often used to let a contractor know when he should begin to start work, according to a document compiled by Daventhan Consult using extracts from the definitive texts Estimating & Tendering for Building Work.
Confer with a legal expert in order to craft a valid construction contract to protect all parties involved.