You hear the term ‘contract’ all the time in the construction industry. But sometimes people might not understand what their rights are in relation to a contract. In this article, we will explain some important things about contracts in plain language.
What Is A Contract?
In simple terms, a contract is an agreement that can be enforced by a court, a tribunal, or an adjudicator, or some other body.
There are many different ways contracts can be formed. Contracts can be written, oral, partly written and partly oral. A contract does not have to be a large document that is signed by everybody involved for the contract to be a binding, enforceable agreement.
Construction contracts can also be formed in all sorts of ways.
A contract in the construction industry can, for example, start out as a very simple agreement for a subcontractor to do some work for a head contractor. But as simple or informal as the agreement is, it can still be a binding contract.
Here is an example of what an oral contract might look like:
A head contractor phones a subcontractor he knows and asks the subcontractor if the subcontractor can do some work. The subcontractor says, “Yeah sure.” The contract has not been written but it could still be binding.
Here is one example of how simple a written contract might be:
A head contractor calls up a subcontractor and asks the subcontractor to do some work. The subcontractor says that he will think about it. A couple of hours later, the subcontractor sends a text message to the head contractor that says, “I can start next week. My rate is $90.00 per hour.” The head contractor texts back saying: “Agreed. See you next week.” This exchange of text messages is not a large document filled with terms, it but could still be an enforceable contract.
Here is an example of a situation where the contract could be described as partly written and partly oral:
Say a subcontractor submits a written quote to a head contractor and the head contractor approves the quote. The subcontractor starts working. As work proceeds, the head contractor, in a conversation, asks the subcontractor for changes to the works. They both agree verbally that the changes are a variation to the works. The subcontractor carries out the changes. Arguably, the quote forms the written agreement, and there is now a variation to this agreement that was made orally.
What Is Contract Advice?
Contract advice is where Lauderdale Construction Lawyers can assist you in understanding what your rights are in relation to whatever type of agreement for construction work, or related services, that you have with somebody else. You can get contract advice at any time, whether you’re thinking of agreeing to do some work; whether you’re wondering about signing a written contract; if you’re already doing work for someone; or any other situation regarding getting paid for construction work or related services.
Remember, there are all kinds of arrangements that could be legally binding contracts. If you want to know your rights regarding these situations, you might need contract advice.
For more information on how we can assist with your construction contracts, contact Lauderdale Constructions Lawyers today on 02 9874 2382.