What should the contract include?

What should the contract include?

The next time you negotiate with a contractor for home improvement work, make sure you read the fine print. A recent Angie's List poll of service companies revealed what contractors consider to be must-haves in every contract, and the contract items they tend almost never include.

More than 60 percent of service companies who took the online poll indicated that they always require a contract before starting any work. Forty-eight percent of poll respondents indicated that their contract includes the basic terms that should be in every contract, the payment terms, the job description and a detailed cost breakdown.

But many said they frequently don't include contract items that a homeowner may themselves find essential. The contract term that most contractors said they never include in a home-improvement contract is details outlining the agreement of what happens if a contractor misses a completion date.

Only slightly less than 2 percent of respondents said they always include missed completion date procedures in their contracts. And when asked what contract detail is never included in their contracts, the leading answer of polled service companies responses, again said completion date penalties.

While completion dates aren't important for many home services or repairs, other, more involved projects such as major remodels or structural changes can cost thousands more when the project is delayed. If your project involves multiple contractors or is inherently time sensitive, make sure you read the contract thoroughly and request a missed completion date penalty clause if the contract doesn't include one.

Another important detail when hiring a home improvement contractor is understanding what and how your jurisdiction requires in terms of contractor licensing. A Los Angeles contractor will have to meet different obligations than a New York City contractor or a Chicago contractor.

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