5 Common Construction Contract Mistakes and How to Avoid Them

Construction projects can be complex, costly, and time-consuming — which is why a solid, well-drafted contract is essential. Yet too often, contractors, subcontractors, and property owners make avoidable mistakes in their construction contracts that lead to costly disputes, delays, and even litigation.

Here are five of the most common construction contract mistakes — and how to avoid them:

1. Not Defining the Scope of Work Clearly

One of the biggest sources of conflict in construction contracts is a vague or incomplete scope of work. When responsibilities aren’t clearly laid out, misunderstandings arise.

Avoid it: Ensure your contract includes a detailed description of the work to be completed, including materials, labor, timelines, and exclusions. Clear documentation helps manage expectations and resolve issues quickly.

2. Failing to Include a Dispute Resolution Clause

Construction projects don’t always go as planned. If a disagreement arises, your options for resolution will depend on what’s written in the contract.

Avoid it: Include a dispute resolution clause that specifies whether conflicts will be resolved through mediation, arbitration, or litigation — and in which jurisdiction. This can save time, money, and stress.

3. Ignoring Change Order Procedures

Changes during construction are common — but if there’s no process to handle them, chaos can ensue.

Avoid it: Establish a clear procedure for change orders in the contract. This should cover how changes are approved, priced, and documented to avoid misunderstandings and unexpected costs.

4. Inadequate Payment Terms

Unclear or unrealistic payment schedules often lead to cash flow problems and legal disputes.

Avoid it: Specify payment milestones, timelines, and penalties for late payments. Make sure the contract includes retention terms, lien rights, and conditions for final payment.

5. Using a One-Size-Fits-All Contract

Many parties use generic or outdated templates that don’t reflect the specifics of their project or jurisdiction.

Avoid it: Have each contract reviewed or drafted by a construction law professional who understands local regulations and the unique needs of your project.

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Final Thought

A well-written construction contract protects everyone involved — and can be the difference between a successful build and a legal nightmare. If you’re unsure about your current contracts, it’s worth consulting with a construction attorney to review or draft them properly.

👷‍♂️ Connect with Joe Tolbert, Fort Worth Construction Attorney, for legal clarity, strong contracts, and peace of mind on your next project.