Area of Law: Construction Law
Answer # 1961
Having a signed agreement with your contractorRegion: Ontario Answer # 1961
Whether your home renovation or construction project is big or small, any time you plan to hire a contractor you should have a written contract or agreement setting out the rights and obligations of each party, specifics of the work to be completed, timelines for the work, payment amounts and triggering events for payments (for example, completion of demolition for a first payment), and how disputes will be resolved.
A written contract is a binding legal agreement that helps to remove the chance of disagreements or risk arising from vague or uncertain aspects of the project, such as quality of materials to be used, upkeep of the work site, and the contractor’s responsibility to maintain workers compensation and other liability insurance.
Even if your contractor insists a contract is not needed, you must insist on a written agreement for your own protection. If a contractor refuses to sign an agreement, you should not do business with that individual.
Essential aspects of a typical home renovation or construction contract include:
- Name, address and Business Number of the contractor
- Date of the agreement
- Drawings and project specifications
- Description of the work to be performed
- Permits requirements and who is responsible for securing permits
- Responsibility of the contractor for hiring, supervising and paying sub-trades
- Work schedule, deadline for “substantial completion” and deadline for full completion
- A definition of “substantial completion” (for example, 95% of the job)
- Process for changes to the project requirements, such as the use of “Change Orders” that must be signed by both parties
- Terms of payment
- Payment schedule
- Standards of work
- Warranty and guarantees
- Contractor liability insurance
- Builders risk insurance
Most importantly, never agree to a contract that requires full or a substantial payment up-front before any work is done. Most contractors can begin a project with as little as 10%-15% or no money down.
For more information, visit Consumer Protection Ontario. For legal help, contact a lawyer.
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