Once you have accepted the proposal and decide to proceed, your contractor will provide you with a contract for you both to sign. Contract formats can vary, but check for yours to have the following elements:
- The contract should display the contractor’s critical info, including company name, address, phone and license number.
- The scope of work should be defined, with as much detail as possible. If this is accurately reflected in the proposal, the contract can simply refer to it. The proposal should reflect total cost, and ideally some dollar amounts associated with different components.
- If you do not have a bathroom the workers can use, expect to see the cost of an outhouse in your proposal.
- The contractor will obtain all necessary permits, coordinate city inspections, and obtain approvals. (In some cases your architect may be the person to submit for design approval, and then the contractor steps in for the permit process.)
- Start date and anticipated completion date should be included, although delays are common.
- The payment schedule. Look for the first payment to be not more than 10% of the projected cost. Subsequent payments should be tied to project milestones. There should be a substantial final payment (5-10%) due after work is entirely completed. Pay by check and keep a record of your payments.
- A statement that any additional work not included in the original bid/proposal must the approved in advance. You may require that additional work be priced and approved in writing via a change order before proceeding, but if your schedule is tight, understand that this will cause additional delay. Still, you want to require some communication to avoid surprises when you get the bill. This is often facilitated through change orders. A good reference on change orders can be found here.
- The contract should include a written guarantee of the work quality and materials, with at least a one year warranty for the work and standard manufacturer warranties on the materials.
- The contract should include the contractor’s responsibility for clean up and garbage removal.
When you have agreed to and signed the contract, you have completed one of the first major milestones. Now take a deep breath, and read about what is to come.