The Contract Blueprint: Build Protection Into Every Project

When you sign a building contract, it’s not just another form – it sets the risk, the timing, and the financial flow for the whole project. Whether you’re an owner, general contractor, subcontractor, or supplier, the below clauses and practices are essential to ——

1. Define the Scope Clearly

The contract should spell out exactly what is to be done, by when, and with what quality standard. Vague terms such as “all work as required” or “builder to complete” is ambiguous and risks interpretation disputes. Generally speaking, owners wants deliverables, milestones, and specifications, and contractors wants clarity on what is included — and what will trigger changes or extras.

2. Set Precise Payment Terms

Late payment is often the root cause of cost overruns and strained relationships. Contractual payment terms should be specific and clearly when payment may be withheld or reduced. Both parties should agree in advance on how change orders are handled, retainage / holdback, and the consequences of delayed payment.

3. Address Change Orders Early

Few projects run exactly to plan. The difference between “that’s included” and “that’s extra” often comes down to how the contract treats change orders. A well-drafted contract will outline a process for approving changes: how they’ll be documented, priced, and scheduled. This helps avoid unnecessary surprise bills, claims, and disputes throughout the project.

4. Include Dispute-Resolution Mechanisms

When something goes wrong, it is important to understand the applicable dispute resolution process. Generally, parties want a quicker, cost-effective path with the ability to resolve before escalating to formal litigation or arbitrations to keep the project moving.

5. Consider Termination and Suspension Rights

What happens if one party fails to perform? The contract should set out clear rights for the owner and the contractor: suspension of work, termination, payment for work done, and how to manage warranties or defects. This avoids being locked into a contract when things go sideways.

6. Make Risk Allocation Fair and Clear

Contracts often shift risk disproportionately. For example, a contractor may absorb weather delays, but the owner expects immediate performance. A fair contract distributes risk: who bears design errors, unforeseen site conditions, or utility delays? Clear wording and defined responsibilities reduce surprises.

7. Ensure Insurance, Warranties & Bonds Are Covered

Make sure the contract specifies what types of insurance (liability, wrap-up, builder’s risk, etc.), warranties (labour and materials, structural), and bonds (if required) are in place. Confirm who obtains them, who pays, how long they last, and how claims are handled.

8. Document Everything and Keep It Moving

Even the best contract won’t save you if documentation and processes aren’t followed. Keep a change-order log, variation register, payment log, holdback register, correspondence file, and dispute-events log. A well-organised contract lifecycle is a win for both sides.

Bottom Line

A good building contract is more than a first draft — it’s your blueprint for performance, payment, and protection. Whether you are hiring, being hired, or subcontracting down the supply chain, investing time up front in contract structure and process will pay off.

If you’d like a second-pair-of-eyes review of your contract, help updating standard templates, or training your team on contract-risk awareness, LEGALLY BUILT is here to help. Reach out today to get ahead of issues and keep your projects on solid foundation.

This publication has been prepared for general information only and does not constitute legal advice or create a solicitor-client relationship. No reader should act or refrain from acting on the basis of any information included herein without seeking appropriate legal or other professional advice based on their particular circumstances. LEGALLY BUILT accepts no responsibility for any loss or damage that may arise from reliance on the information contained in this publication.