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Spring Ahead… a Good Reminder to Review Construction Contract Requirements

With spring and warmer weather suddenly upon us here in Minnesota, soon construction season again will be in full swing as well. Before contractors are in the midst of another busy season, now is a good time to review business practices to prevent later costly and time consuming misunderstandings and disputes with customers, and to ensure compliance with Minnesota law.

Contractors should ensure that they are regularly utilizing statutorily compliant written contract forms on their construction jobs. Contract forms allow the customer and contractor to document their understandings and expectations on how a construction project should be completed, preventing later misunderstandings and conflicts during the course of the job. Contracts also provide the contractor an opportunity to ensure delivery of several statutorily required notices such as mechanic’s lien notices, 327A warranty provisions, 3 day right of rescission notices, lead paint notices (for remodeling projects) and insurance notices (for residential insurance jobs).

Not only does a written contract prevent later misunderstandings and allows contractors to incorporate legally required notices, but if a contractor is performing licensed contract work in Minnesota, it is required by statute. Minnesota law requires a licensed contractor to have all proposals, estimates, bids, quotations, contracts, purchase orders and change orders in a writing which must contain the following information

  • A detailed summary of the services to be performed;
  • A description of the specific materials to be used or a list of standard features to be included; and
  • The total contract price or a description of the basis on which the price will be calculated.

Licensed contractors also must provide customers with written performance guidelines for the services that are to be performed and a signed and dated contract at the time the contract is signed.

By reviewing contract forms and business practices now prior to the construction busy season, contractors will be better able to focus on the construction job at hand and, in the event of any dispute, be in a better position to come to a quick and favorable resolution to the matter.

The information provided within this article is a broad overview and general discussion of only some of the major issues to consider when completing a construction contract form and is not intended to be legal advice. You should seek the advice of competent and qualified counsel to review your specific situation.

© 2016 Rinke Noonan