Legal Guide for Hiring Contractors

Navigating the contractor hiring process requires careful attention to legal safeguards that protect both your project and investment. This comprehensive guide outlines essential steps to verify credentials, establish clear contractual terms, and implement proper oversight throughout your construction project. Following these proven practices will help you avoid common pitfalls and ensure a legally sound contractor relationship from start to finish.

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1. Check contractor references:

• Request the names and phone numbers of the last three completed projects.

• Contact project owners to inquire about their experience.

2. Inspect completed work:

• Visit at least one project site.

• Check the quality of the detail work for any warning signs of poor craftsmanship.

4. Verify credentials:

• Ask to see the contractor’s license for the work you want completed.

• Ensure they provide a copy of their insurance policy and bond.

5. Create a clear contract:

• Incorporate the estimate into a concise and clear agreement.

• Ensure the agreement includes the work description, cost, and both parties' signatures.

• Set a time frame and payment term:
  1. Specify the completion time frame in the agreement.
  2. Include a “hold back” provision allowing you to withhold final payment until work and inspections are complete.

• Have a lawyer review the contract before signing to ensure all terms are clear, legally binding, and protect your interests.

7. Review cost-plus agreement:

(applicable in certain circumstances)

• If on a “cost-plus” basis, request copies of all invoices.

• Ensure invoices are marked as “paid” before reimbursing the contractor.

8. Document changes to work:

• Ensure all work changes are documented in writing.

• Include both a description of the change and any price adjustments.

• Both parties should sign the change orders.

9. Inspect the work progress:

• Regularly inspect the work being done.

• Compare the progress to the agreement and address any issues early.

Ensure you cover all the key points in hiring a contractor to help avoid miscommunication or disputes. Be proactive in securing your legal and financial interests.

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