Using another contractor’s contract or a model document provided by a trade group or online source can be as risky as taking someone else’s medication rather than consulting your own doctor. And making your construction business contractually liable for more than is legally required is even worse than exceeding the prescription’s recommended dosage.
In construction and business law, one size seldom fits all. The safe way to use a model contract is to have your legal counsel explain every provision and tailor the document, as needed, to suit your business.
Don’t get me wrong. When drafting contracts and other documents most attorneys start with boilerplate provisions that legal precedents make enforceable. Courts reward clarity, not creativity. However, every good contract and business document then is fine-tuned to reflect the user’s specific business practices and applicable laws.
Build Professionalism, Manage Liability
Trade organizations such as the Builders Association of Minnesota (BAM), Builders Association of the Twin Cities (BATC) and National Association of the Remodeling Industry (NARI) benefit members by sharing sample documents that reflect best practices. But they should not be used in contracts without professional guidance.
Think of your signed, written construction contract as a private law between you and your client that sets the rules of the game. Consider the game of Monopoly. Do you collect $200 when you land on GO or when you pass GO? Do house rules differ depending on where you are playing?
Your contract should reflect your rules, not the rules that a “standard” contractor follows for its projects. You also should know how to respond if a client asks to amend a contract provision.
Performance Guidelines for good KISSrs
Performance guidelines can comprise the most liability-laden section of any construction contract because they lay out standards for what you will do and how you will do it. Although Minn. Stat. Sec 326B.809(b) has required contractors to include performance guidelines in their written residential construction contracts since 2010, the state still has not issued rules specifying those standards beyond building in accordance with building codes and manufacturer specifications.
While industry groups encourage professionalism and promote best practices by publishing performance guidelines, you don’t necessarily want to build the particulars into your construction contract where you will be legally liable for the higher standards. Rather, work them into your marketing materials and develop procedures and talent to achieve them. Better to be the hero in the field than on paper. Less risky too.
Get Contract Savvy Today
It is enormously dangerous to operate a construction business in Minnesota without written contracts. Bu it can be nearly as risky to use an off-the-shelf template contract that you don’t fully understand.
If you have questions about your own contracts and documents, please contact Minnesota Construction Law Services (MNCLS). What you don’t know CAN hurt you.