Construction and Sales Contracts

Contracts with subcontractors | Development and Subdivision Contracts

Construction and Sales Contracts

Sample Construction Contracts

Recommendations on all construction and sales contracts:

1. Home Builders should carry builder's risk insurance whenever possible

2. Should homeowner insist on carrying builder's risk:

• Home Builders should be listed as an additional insured or at minimum as a loss payee
• Coverage should include theft of building materials
• Contract should stipulate limitation on insurer’s minimum acceptable A.M. Best (financial) rating
• Contract should state what perils are to be insured against (fire, wind, flood, etc…)

3. Contract should state who is responsible for deductible on builders’ risk

4. Contract should reference homeowners manual and the maintenance obligations of the homeowner

5. Contract should specifically detail any work to be undertaken and/or paid directly by homeowner and should release home builder from any liability resulting from the specified work (ex: homeowner pays subcontractor for pool and pool deck or finished landscaping)

6. Contract should limit access by homeowner and hold builder harmless if they or a guest is hurt without the builder present at the time they enter property.

7. Contract should contain an escalation clause to protect Home Builder from spikes in material costs

8. Contract should contain a mold disclaimer and waiver

9. Contract should include a revision date

10. Contracts should state that “any and all claims, disputes, and controversies of every kind and nature by or between the parties hereto arising from or related to the subject Home identified herein below, or to any defect in or to the subject Home by the Builder, including, without limitation, any claim of breach of contract, negligent or intentional misrepresentation or nondisclosure in the inducement, execution or performance of any contract, including this arbitration agreement, and breach of any alleged good faith and fair dealing, shall be submitted to binding arbitration” or similar wording.

11. First page must  contain the following:

PURSUANT TO SC CODE §15-48-10 ET SEQ., CERTAIN PROVISIONS OF THIS AGREEMENT ARE SUBJECT TO BINDING ARBITRATION, AS AMENDED FROM TIME TO TIME