Contractors and Contracts

[bczygan]

There have been a number of threads here on GJ, detailing horror stories of the construction, or should I say, improper construction of their buildings.

It disappoints me to see these disasters.

In most cases, it is the owner who ends up biting the bullet and footing the bill to correct things.

This should NOT be so.

In a past life I was a purchasing agent in construction. Responsible for finding and signing up contractors to contracts for our projects.

Books have been written, on contractors and contracts. So I won't rehash it all here. But a couple of key points need to be made.

First, and most obvious, is the need for good contractors.

What is good?

Good in my book, means they are competent tradesmen, capable of the full array of work they claim to be able to accomplish, to the quality level I desire. They must also be good businessmen, able to manage an ongoing concern. I want them there for any warranty work and possible future work.

This means they must make a profit, to stay in business. So a fair and reasonable profit must be part of the deal.

There is an inherent difficulty with contracts and contractors, a push and pull.

A contractors first responsibility is to himself and his company. But in a contract, he also has a fiduciary duty to the other party in the contract.

But this duty only extends as far as the contract states.

A contract, and the associated drawings and specifications that become a part of the contract documents are the only tools an owner has, to require performance from an contractor.

So they had best be concise, complete and detailed.

Yes, you need to be very careful in your search for a contractor, but once decided upon, the contract rules.

And the contract must be a meeting of the minds between the parties.

Good contracts cover every conceivable detail. This protects all involved parties. A good contractor doesn't fear detailed instructions, because he is detailed in his work. And detail lets the owner know exactly what he is getting, with no misconceptions and disappointments.

More and more, contracts detail measurable quality levels required. And of course, every detail of construction must be assigned to someone in the contracts. Anything NOT in the contracts, ends up being the responsibility of the owner.

The last thing to worry about, is who is responsible when things go wrong, and how faults are remedied. If this isn't covered, in writing in the contract, it becomes the owners liability. I always ask, if this installation is faulty, and has to be removed and replaced, who pays for it? And then I make provisions in the contract to cover that eventuality. Bonds and withholding for warranty work and scheduled draws for completed work help with this.

I guess what I'm saying, is the more sophisticated you are as an owner, the more detailed you are in your process of finding and contracting the work, the better you can avoid disasters, or recover from them.

Bill

 

[Zeke]

All good, Bill, but as you know, the higher you go on the ladder, the fewer you find that can stand the height. In my 44 years as a contractor I did the most detailed contracts found in any homeowner's folder. They were friendly and to the point. CA requires a lot of verbiage and actually states what size font you must use. One other company had the full monte besides me and he is a plumbing contractor.

I think most contractors think a highly detailed contract will scare the homeowner away whereas in commercial construction a lawyer is probably gonna go over it. I've seen way too many jobs start with a figure jotted down on the back of a business card.

Seems like most turn out OK but when things go wrong, as you say, the paperwork just isn't there over which to debate any issues.

I'll bet the single biggest thing I see here on the GJ is poor concrete work. If everyone demanded a full length contract that states "no birdbaths," IOW, proper drainage with no standing water, better workmanship will be done.

Either that or no one will come out and place concrete.

 

[69gp]

Bill

This is a good information that you have provided. I am primarily a subcontractor but have done GC work where the main contract was electrical.

One item that should be noted is that when change orders come up who is responsible. Was it an architect or engineer initiated change based on them missing something? was it GC or Sub do to an error on their part or was it client initiated.

In 25 years most of the changes I have seen was due to either an architect or engineer deficiencies in the drawings. Only once did I ever see anyone of these guys use their error and omission insurance. That's because the extra was 600k. In general the cost is most always passed along to the customer. Thats not right in my book.

If the GC makes an error or highers a sub that does sub par work it's up to the GC to make it right not the home owner.

If the client wants to make changes then the cost is with him.

It may be wise to have incorporated into the contract what the hourly wage is per trade. Price should included all insurance and markup. This can be useful if an when a dispute needs to be corrected.

 

[bczygan]

Another good thing that detailed documents and contracts do, is to educate the customer.

And we need educated customers, so that their expectations match realities, resulting in not just less disappointment, but actual satisfaction, maybe even happiness.

This thread is really pointed at them, the GJ members planning a build. The more homework you do, the more involved and educated you become, the better the job can run and the result be what you wanted and expected, with no unhappy surprises.

Bill

 

[zendriver]

I guess what I'm saying, is the more sophisticated you are as an owner, the more detailed you are in your process of finding and contracting the work, the better you can avoid disasters, or recover from them.

Bill

Good points, but highlights how sad our world has become.

In the old days - for the most part, people who can't/won't pour their own concrete (or anything else), will hire a professional, with the assumption (once known as trust), that not only can they competently lay concrete properly, but they know the costs, plus the pitfalls that can effect cost overruns, etc. and have that covered.

Now we have to basically know everything about concrete and the pouring of it, to make sure that the contractor is competent and honest and has communicated everything properly..

It's nearly this way with auto repairs, mortgages, auto insurance, eBay, most anything else, any more. We have to become experts, just to keep from getting taken.

No doubt good contractors, see similar changes, from their side, as well, especially customers, who complain, often loudly about nothing, just to get money discounts, or change their minds on details, after the work has begun.

Thanks for the head's up.

 

[Jack D]

Interesting discussion. I am currently waiting for a subcontractor to start a foundation for my new detached garage. I am the GC in this job and I had a few contractors price the job so I could move up the work and get the outfit that is going to do the stick work and basically build the exterior started earlier. I eventually went with the foundation contractor that the 'stick' contractor suggested for the exact same reasons that are being discussed here.

I actually decided to go with another guy that had done some other work for me. He was a little bit less because I think he was local to me so travel time was a non factor. The reason I did not sign the contract was he would not agree to add to the contract a line item make his work acceptable to the carpenter to start the building. Basically if his work was substandard and I had to repair it he would not make the repairs as part of the contract. He would only agree to what he called 'industry standard deviations'. When I asked what that was he said it was 1/2" in the measurements. He said it would probably be less but he could/would not guarantee that in writing. He talked the talk but would not back that up with his $$$.

The stick contractor says he doesn't usually have to shim the plates but occasional does. He has only had one or two foundations that have been a problem over the years. He did not state whether or not those conditions were materials or workmanship issues. So I decided to wait for the carpenters subcontractor so I don't have any issues. A couple of weeks earlier wasn't worth the grief if something went wrong.

Jack

 

[Zeke]

I have found many templates on the Net with respect to what contract says and how it should be written. Owners should look up their state requirements as they differ from state to state. Maybe look up some other states too just to get a broader view.

As I said, CA contracts are pretty extensive AFA providing consumer info including lien rights, allowable payment schedules and a hell of a lot more.

I will again say that many contractors just don't do due diligence. This may be due to lack of education on the matter. It's pretty easy to graduate from being a tradesperson to wanting to take on jobs on your own. Learning a trade is not anything like learning how to be a contractor and many take the plunge before they are informed and ready.

This is the type of person to stay away from.

 

[nh_yota]

Too many people run into bad contractor situations because they cheap out and/or don't select the right contractor. Good contractors aren't cheap because they don't have to be cheap to get business. I've heard too many stories that begin with "it seemed like a good deal at the time".

 

[Gas Ax]

as you know, the higher you go on the ladder, the fewer you find that can stand the height.

This is very true, and there certainly is a cost associated with a contractor who is well enough versed to take on a job knowing that the owner has something to hold them to. Now this cost is offset by the reduction in risk that you have when dealing with a well spelled out contract.

Of course this can also be taken to extremes. As a former project manager for a VERY large contractor our standard subcontract boilerplate was 96 pages not including any drawings, specifications, or referenced industry standards/codes. Trying to get sub contractors to sign either resulted in one of two things: a long protracted battle over terms and conditions, and or them signing it blindly and hoping for the best. Now these were contractors who had been around the block a time or two I could only imagine what would happen if the average home owner saw something like that. Thankfully we never had to deal with the general public working primarily for industrial owners.

The reason I did not sign the contract was he would not agree to add to the contract a line item make his work acceptable to the carpenter to start the building. Basically if his work was substandard and I had to repair it he would not make the repairs as part of the contract. He would only agree to what he called 'industry standard deviations'. When I asked what that was he said it was 1/2" in the measurements. He said it would probably be less but he could/would not guarantee that in writing. He talked the talk but would not back that up with his $$$.

And as a contractor I would have walked away from such a demand as well. "Acceptable to the carpenter" is just as ambiguous as no spec at all, and just leaves the door open for rejecting the work no mater how good it is. What you needed to do was have a discussion with the carpenter to define how flat he needed the concrete work to be. Something like, "No more then +- an 1/8th inch in 10 feet or 3/8" overall." Now I have no idea if those numbers match the carpenters needs at all, but it does define a measurable level of acceptance. Then in counterpoint you would need to incorporate the same language into the carpenter's contract so that when he comes on site to a slab meeting the specs he does not have an out to say the concrete has some issue that is going to cost extra money to correct.

This advise in in no way all inclusive and worth what you paid for it.

 

[theoldwizard1]

I have amended a couple of contracts for contractors my son has hired. Typically I verbally discuss my point, to which they all agree. Then I put it in writing, which does tend to shock them !

I had a specific list of about 10 items on my son's roofing job. After sales rep (family member) read it, he signed it without hesitation. Of course it was up to me to make sure it was handled. I was there when the material truck showed up before 8AM with the wrong OSB and refused delivery. This did cause a bit of a delay (1-2 hours) in the project while they scrambled to get the correct material. I also made a point of seeking out and presenting the addendum to the local supervisors. The fat old guy stand around with camera also made them know I was serious !


Second time was for landscaping at my daughter's. I had clauses for penalties for late start and completion dates that they did not like. They wanted it completely open ended but I refused. The addendum did state "or alternative date mutually agreed upon". In the end, I think they ran over by 1 day (they had padded it by a couple to start with), but I never said a word. Being there, day in and day out helped.

I also freaked out some other contractors when I cooked up some bratwurst, bought some fresh rolls and chips. Plenty of water and iced tea. One of the crew said "Nobody ever does anything like this for us !" Great $20 investment and it made me feel good !!

 

[Empty Pockets]

In a past life I ran the Formica Department of a local custom cabinetry manufacturer.

On any job that we did, the owners insisted that the customer be 100% satisfied (above and beyond the terms of the contract).

Those of us in the production departments, as well as our installers would jump through hoops to please even the most insane customer.

One day, my boss asked me to make arrangements to look at a remodel job where the customer had a complaint. I called, made an appointment to look at the job on the way home from work. On arrival at the home, Mr. and Mrs Homeowner greeted me, showed me the kitchen, and the perceived defect and a couple of issues that were not called in. I agreed that there were problems, made arrangements to personally make the repairs in 2 days.

Once the repairs were done (total time involved less than 2 hours both counter and cabinets), we parted on friendly terms.

The kicker is that a few days later, the General Manager got a letter from Mr. Homeowner on his work letterhead, commending everyone on the way the problems were handled. His work letterhead showed that he was the Managing Assistant State Attorney General at the local office. Kinda shows that a good contractor/firm will do everything they can to please the customer, as you never know who they are.

 

[Empty Pockets]

I recently had some insurance work done at the house.

Our 1st choice of a contractor claimed to be "Fully Insured". When I asked for a Certificate of Insurance, and asked that I be named as co-insured, he balked.

Our 2nd choice contractor provided the certificate, without hesitation, and the work was done as contracted.

 

[DCarr2]

It actually amazes me at time as to what some contractors get away with in terms of their contracts. And then when they end up in court and lose they wonder why. I am actually in the process of reworking my own contract to submit to my attorney for reveiw, my current one works but, its dated..

I also, have had the pleasure of looking over my competitors contracts in the past, its startling to say the least.

I am a painting and plastering contractor, that does the occasional drywall work.. I have seen paint contracts that state: Paint living room, 2 coats. Paint ceiling. paint trim. $500

Then theres mine (I still hand write all my contracts)

Repair minor damage in walls and ceilings. Spot prime repairs.
Apply 2 coats on interior eggshell to walls on the North, South East walls, Apply second color to West wall only.

Apply 1 coat of ceiling paint to ceiling.

Sand, spot prime bare wood, caulk cracks in wood work, apply one coat of paint to wood trim.

Then I stipulate the exact Materials I use... I have seen 'Paint' as the materials used... Well wait, if I want to compare contracts, to see what I am paying for what type of paint?

that garbage trim paint for $20 a gallon at Home Depot, or a quality latex enamel like Sherwin Williams Proclassic ($60 a gallon by the way - its all I use unless they demand oil, then its Ben Moore Satin impervo...ugh hate oil LOL)

I list my paints and primers for each job. exactly what we will be using. And any left over colors I leave with them, labelled so they know where in the house they go... thats another one, I found out most of my competition takes the left overs if its over 1/2 gallon... thats stealing in my opinion, and second, what do I want to store hundreds of gallons of colors? no thanks.

And I fully believe in the educated customer. I would rather deal with a person that has a clue than one that doesnt have a clue. I also stand behind my work 110% and in 6 years, have only had one call back and that was because their roof was still leaking... after they 'fixed' the leak. after that I bought a $30 moisture meter at lowes.

 

[Pwrgeek]

This is very true, and there certainly is a cost associated with a contractor who is well enough versed to take on a job knowing that the owner has something to hold them to. Now this cost is offset by the reduction in risk that you have when dealing with a well spelled out contract.



Of course this can also be taken to extremes. As a former project manager for a VERY large contractor our standard subcontract boilerplate was 96 pages not including any drawings, specifications, or referenced industry standards/codes. Trying to get sub contractors to sign either resulted in one of two things: a long protracted battle over terms and conditions, and or them signing it blindly and hoping for the best. Now these were contractors who had been around the block a time or two I could only imagine what would happen if the average home owner saw something like that. Thankfully we never had to deal with the general public working primarily for industrial owners.









And as a contractor I would have walked away from such a demand as well. "Acceptable to the carpenter" is just as ambiguous as no spec at all, and just leaves the door open for rejecting the work no mater how good it is. What you needed to do was have a discussion with the carpenter to define how flat he needed the concrete work to be. Something like, "No more then +- an 1/8th inch in 10 feet or 3/8" overall." Now I have no idea if those numbers match the carpenters needs at all, but it does define a measurable level of acceptance. Then in counterpoint you would need to incorporate the same language into the carpenter's contract so that when he comes on site to a slab meeting the specs he does not have an out to say the concrete has some issue that is going to cost extra money to correct.



This advise in in no way all inclusive and worth what you paid for it.

This is the main piece of advice I give friends and family when they are hiring contractors. Put the things you care about in the contract in objective terms. So instead of something like "walls will be acceptably true and straight" put "walls will be plumb to within 1/4" top to bottom and will be straight to within 1/8" both latterally and vertically" obviously the tighter you make the numbers the more you will pay but it is something both you and the contractor (and a court in the event it is needed) can go back and measure later. Gives everyone a common basis for what constitutes an "acceptable" job.

 

[RivennHewn]

The other point of view is:

Clients should read and understand the contract and all documentation.

It always surprises me that a client can look at a set of plans for months and still not understand what they are getting.

So many times I have to pull out the contract, and explain to them what they are buying.

 

[DekeT]

The contract advice mentioned in this thread is excellent and should be the basis for a deal between parties. An equally important part of the equation to me is the failure of a buyer in the selection of qualified contractor and the willingness to pay for that better service.

So many more people have moved to areas where large outbuildings are permitted it has caused a demand for more contractors to erect them. Not all of those contractors are good ones and many of those customers are not willing to pay for good ones. We are faced with a situation of more inexperienced and cheap customers dealing with inexperienced or unethical contractors. This scenario has always been there but the mass exodus from the suburbs and city to country "estates" has accelerated. The problem is simply larger today.

 

[DCarr2]

well Deke its like that in alot of trades... Anything bad happens to the stock market and people get laid of by the tens of thousands, you suddenly have 50 new painting 'contractors' that buy a ladder and use the family minivan... they have no clue as what they are doing arnt insured, and give the rest of us a bad rep.

the other major factor in all of this is the massive push by govt, colleges and big business to push every kid into college, whether its what good for them or not. in the process we removed the trade and vocational schools.

Add in the piss poor work ethic of 98% of those under 35 years old, and the pissed off sick and tired of the stupid BS of the 50-70 year old tradesmen that actually know whats going on, and you my friend have the perfect recipe for disaster

you have a generation that wants everything handed to them, and doesnt want to learn, and another generation that doesnt want to take the time to pass on the skillset.

todays kids are told over and over and over, that you will be worthless, youll never have the 'american dream' unless you deeply into debt and get a college degree. now granted there are cases where people pull it off with out the debt, but considering college debt now surpasses 1 trillion, id say that the vast majority are holding major debt.

So add major debt, a piss poor job prospect - remember they have been told forever to 'go to school, get an education, and get a good job'

sorry but that is complete ******** today...the good jobs are 'gone' and arnt coming back. the trades however, still offer a good buck, with out the debt. problem is, 98% of those under 35 want the cubicle, not have to actually work, and get paid top dollar.

on a last note, reading of the contract period seems like a major chore for alot of people. I use my contracts as a 'to do list' so I follow it... I cant tell you how many times my customers never even bothered to read it, but just signed it. I even added a cover page with big bold black font that states: PLEASE READ ENTIRE CONTRACT PRIOR TO SIGNING

And I still get the odd ball that still doesnt read it.

 

[davejo]

Does anybody feel like looking at this contract for comments?

We're looking at building a pole barn and we are getting along well with this contractor in the quote phase.

I whited out the prices to reduce distractions regarding the specific numbers.

 

[nadogail]

Great Thread

 

[Pwrgeek]

I would think that those of us on this site are in a position to help develop some specification templates for detached garages. I'd think we could develop something for each common type of construction (pole, red iron, stick etc) that would put the average homeowner in the ballpark of a good technical specification to hand to a contractor as an addendum to any contract. I'm willing to help (electrical is my area of expertise) if anyone else is willing to participate.

 

[MushCreek]

Having just finished building our own house, I've been active on house building forums for as number of years. I'm continually shocked at the screw-ups made on expensive custom homes. More than likely, they try to get the poor customer to pay to make it right.

I don't know what the solutions are, other than learning as much as you can, and watching them like a hawk. I build plastic injection molds for a living, some as expensive as a house, and there is simply no room for error. Everything has to be right, or it gets fixed at the tool shop's expense. In some shops, we couldn't even correct a tool by welding, shimming, or plating. If a component was out of spec, it had to be made over. I can't imagine what would happen if contractors were made to work to these standards, other than price of houses would skyrocket. They should at least have to make it meet code without trying to weasel out of it. A friend of mine recently had a place built, and when they built the front porch, they just laid the beams on the dirt- no footings at all! They were forced to make it right, of course. How does a supposed pro think that this is OK?

 

[CTyankee]

The contract advice mentioned in this thread is excellent and should be the basis for a deal between parties. An equally important part of the equation to me is the failure of a buyer in the selection of qualified contractor and the willingness to pay for that better service.

So many more people have moved to areas where large outbuildings are permitted it has caused a demand for more contractors to erect them. Not all of those contractors are good ones and many of those customers are not willing to pay for good ones. We are faced with a situation of more inexperienced and cheap customers dealing with inexperienced or unethical contractors. This scenario has always been there but the mass exodus from the suburbs and city to country "estates" has accelerated. The problem is simply larger today.

I won't offer much more in terms of contracts that has already been mentioned. I will try to offer some advise to reduce the chance that one will need to use it after the fact to get the desired results.

A good contract should provide recourse for the HO to insure they get what they pay for. But even then, what you paid for can be open to different interpretation. And I'd agree that the above mentioned combo can often lead to an unsatisfactory job. Combine an uneducated HO and a bottom line GC is just asking for trouble.

One example.

Years ago was working on a remodel. The HO next door wanted to demo and build a new home and asked for an estimate. Her timetable and budget didn't quite jive with ours. No problem. Enter the "briefcase" contractor. New shiny truck, clipboard and loafers. Watched some of the quickest, marginal construction I've ever seen.

Now realize, the 2 homes were about 30 ft apart. The exterior was a vinyl shake panel which we've used before. Watched as the 2 foreign laborers struggled with the install. Understandable, since they were mating them from the wrong direction. They finally asked if we were familiar with the siding and if they were doing it right. After a quick explanation, they had that part down, but still nowhere near the knowledge needed to do a proper job. Icing on the cake was the "GC" showing up later in the day to encourage his workers and quote "I'm trusting you guys know what you're doing"

A year later, a pipe under the kitchen sink froze and flooded the entire first floor. This was caused by the bay window it overlooked not being insulated correctly. There was also in issue with a leak in the attic near the chimney. We were eventually hired to fix the issues, but it was apparent many more would arise in the future. IMO, a good contract in this case would have been one that provided monetary compensation for repairs/fixes. I doubt I'd have allowed the company back to re-do anything.

I don't like painting with a broad brush. But I've seen too many examples of no-nothing GC's, assembling a bunch of no-nothing subs, whose sole goal is to get in and out...and on the next job.

Maybe I'm biased. I work for an extremely small building company, and we usually work for folks where the cost factors are lower on the ladder given the total picture. Even so, my boss..the GC and owner of the company..works side by side with us everyday, every hour of the week. We use long time subs with good reputations. Even with quality subs, it's easy for stuff to be missed or overlooked due to changes or miscommunication. Extra eyes on the job in real time greatly reduces mistakes. A GC with 40+ years experience still isn't worth diddly if they are never on the job site.

It might not always be possible, but I've always recommended that HO looking for contractors stay with smaller outfits. A good GC can be worth their weight in gold if they are actually qualified to be one and actually perform the duties expected. Bad ones.. can be just an added cost(and a very large one) that can lead to poor quality, mistakes and headaches down the road.

HO's need to share the blame here too. Being that a home is probably the biggest expenditure one will make in a lifetime...be curious. Lower costs through design...not use of inferior products. Get to know your "employees" I recommend meeting ahead of time with all the subs(or at the least their boss) too. If a GC balks at this, it would raise a red flag for me. Set up regular meetings with the GC, not just when problems arise. Don't be a pain in the ***, but don't accept "trust me" if your gut says not too. Most good GC's would welcome an educated, interested HO who will appreciate their work. Even if all of the above just isn't feasible, at least spend some time educating yourself in terms of products and construction techniques. Yeah, it takes some effort, but with the internet there's tons of knowledge available for free.

Sorry for the long ramble. Hope it adds some additional info to this thread to help HO navigate the world of construction and avoid some of it's pitfalls.

 

[Vintage Veloce]

Hmm... well, I'm going to chime in on this. I'm not a contractor, just a home owner. And I'm not a lawyer but I have done a lot of business and have dealt with a good number of contracts.
I've done 4 big jobs ($20 to $100k) on various homes I have owned, and the first three went very well. But this past summer I had a job go badly with a contractor. Much of the problem was that he grew his business too much (6 separate jobs and he was building his own house) and he never gave proper attention at our job.
But we had a contract problem too. The rafter tails on the 100 year old building were termite rotted, before the start of the job he actually reached up and squeezed the wood like it was a soft sponge and he easily tore an end off like a piece of soft cake. We put in the contract: "Repair / replace damaged rafter tails on the garage."
The project was a big one as the garage was a complete mess. But when we got to the rafter tails, suddenly the contractor balked. They were mostly all shot, say 17 out of 20. And now the contractor claimed he only said he would repair a "couple" for the agreed price. I reminded him how we had walked around the building a couple months before and how he had squeezed the tails and torn one off: he knew they were all bad then.
There is more bad work to the story, but I ended up getting the lien releases and firing the contractor. He was actually apologetic and refunded a portion of the job that was completed, as he knew the project was "a failure" in both our minds, and he said as much. He was honorable at the end.

When looking up how to handle the dispute, I spent a bunch of time on the "California Contractors State License Board" web site. And I found that it strongly protects the contractors and does little for the homeowner. I also read a bunch of the standard contracts that are available, and in the same way they seem to be all about protecting the contractor. And the whole mechanics lien situation, where a SUBCONTRACTOR for your general contractor can put a lien on your home when the GC doesn't pay them!? WTF?
Essentially, all the contracts for residential construction that I have seen heavily favor the GC. You are locked in with the contractor, you can't easily withhold payment, It's hard to specify quality, the subs can put liens on your house, etc.
Also, where I live (San Diego) good contractors are in high demand. Getting them to sign a contract that you write is very unlikely. They would rather just go to the next job than have an attorney review a new document.
And more about the license board: I find it very interesting that if you complain about a licensed contractor, the board has a slow process that protects the contractor... but if you complain about an unlicensed contractor, they drop the boom! In that way, the homeowner might have more leverage against an unlicensed contractor.

Anyway:
Here is my plan for the next job:
- I'll get a detailed estimate on the plans and permits that are pulled in my name. Don't be locked into a contractor because the permits are in their name. Additionally, Contractors like "ready to go" projects around here.
- I will check references on more than three RECENT jobs the contractor has done and I will visit and inspect the quality of the work.
- I will only hire a contractor that works on his own team and only does 1 job at a time. No absent management. (I was amazed how many GC's are just salesman and then are never on the job).
- We will have a short time and materials contract with a fair hourly rate. The contract will clearly state that work that doesn't pass inspections or meet code will be redone or fixed at no cost. I'll also say the same for "industry standard quality" but that will likely be unenforceable. I'll also watch them carefully!
- The majority of the payment for each step will be made AFTER the relevant inspection PASSES.
- All significant subcontractor payments will be made by me and I will get a lien release when I make the payment.

Contracts are important. In my experience, they are about making sure both parties understand what they each expect. But as soon as there is a costly issue that causes both parties to look at the contract, you have a problem that isn't likely to be resolved happily.
With a good contractor, if his team makes a mistake they will fix it without considering billing for the problem. And a good contractor will be very careful not to make a costly mistake, like pouring the foundation wrong or cutting the roof trusses. Mistakes like that can destroy a contractors business and often they just cannot and will not fix those mistakes... so they just cannot make them.
On the other hand, a good client will realize when they want something more than was estimated at the beginning, they will have to pay extra. And that "sh*t happens" and the client might have to adjust what they want a bit.

Well, that's this client's opinion.

 

[Vintage Veloce]

My post above was perhaps too long. And as I though about it, for me, it boils down to this:

1 You must hire a "good" contractor.
2 The contract just helps you both understand the project. Don't expect you can use the contract to actually enforce much about the actual work. See #1. You enforce the actual work details and quality with the payment schedule: See #3.
3 You need protection in the contract from the possibility of a "bad" contractor or bad work. The contract MUST allow you to fire the contractor and exit the job without undue expense. Part of this means you must never pay the majority of payment for any work before it is completed (and that means "passes government inspection"). And it means that you must own the plans and handle the permits (if at all possible). And you must get lien releases for any significant payments to subcontractors.

Ah, now, that is what I wanted to say. ;-) Again, Just my opinion.

 

[pmiranda]

When times are good around here, you can pay more but you can't get a better job done.
We finally did find a design/build firm that is really tight with their subs. It costs alot more than the first project we ever did on the cheap but I don't have to babysit all the subs myself, there is a proper contract, and all plans and drawings in autocad so I can review them in great detail at will. They make no bones about showing their GC markup on every line item but I know it is worth it when they fix mistakes on their dime.