Payment schedules and terms are the backbone of any contract, the nuts and bolts that keep the agreement moving and everyone happy (hopefully). They outline when, how, and how much money changes hands, preventing awkward misunderstandings and potential disputes down the line. Think of it like a roadmap for the financial aspect of the agreement, guiding both parties on their journey to successful completion.
A well-defined payment schedule clearly states the due dates for payments. This could be a single lump sum at the end of the project, a series of installments tied to milestones, or regular payments like a subscription. The frequency can vary widely depending on the nature of the contract, from weekly payments for ongoing services to a single final payment for a delivered product. For example, a construction contract might stipulate payments upon completion of specific phases like laying the foundation, framing, and finishing.
The terms of payment detail how the payment should be made. This includes the accepted methods, such as check, wire transfer, credit card, or online payment platforms. It also covers any associated fees, like transaction charges or currency conversion costs. Specifying these details upfront eliminates confusion and ensures smooth transactions. Imagine agreeing to a project only to discover later that the client only pays in cryptocurrency when you dont have a crypto wallet!
But payment schedules and terms arent just about logistics. They also serve as a safety net for both sides. For the payer, they provide predictability and control over expenses. They know exactly when and how much to budget. For the payee, a clear schedule ensures timely compensation for their work or services, protecting them from late payments or non-payment. This mutual understanding fosters trust and a positive working relationship.
Finally, incorporating clear payment terms into a contract can help prevent disputes. If a payment is late, the contract provides a framework for addressing the issue, potentially including late payment penalties or interest. This clarity minimizes the potential for misunderstandings and costly legal battles, allowing both parties to focus on the core of their agreement. In short, well-defined payment schedules and terms are essential for a smooth, successful, and legally sound contractual relationship.
Change orders. Those two words can send shivers down the spine of anyone involved in a contract, whether youre the client, the contractor, or somewhere in between. They represent deviations from the original plan, and deviations often mean headaches, cost overruns, and schedule delays. Thats why having clear, well-defined change order procedures within your contracts and legal agreements is absolutely crucial. Think of it as your projects safety net, catching potential issues before they spiral out of control.
So, what makes a good change order procedure? First and foremost, it needs to be explicit. Dont leave anything open to interpretation. The contract should clearly state who has the authority to initiate a change order. Is it just the project manager? Does it require sign-off from higher-ups? Similarly, the process for requesting a change needs to be spelled out. Is it a formal written request? A specific form? An email? Dont assume anything.
Next, you need to address the thorny issue of cost. How are changes going to be priced? Will it be based on pre-negotiated rates, time and materials, or some other method? What about if the scope of the change is unclear at the outset? Consider incorporating a mechanism for interim payments or provisional sums for such situations. And importantly, who approves these costs? Having a clear approval process prevents nasty surprises down the line.
Documentation is king. Every change order, no matter how small, needs to be meticulously documented. This includes a detailed description of the change, the rationale behind it, the impact on the project timeline, and of course, the associated costs. This documentation provides a vital audit trail and can be invaluable in resolving any future disputes.
Finally, and perhaps most importantly, communication is key. Establish clear lines of communication between all parties involved. Regular meetings, progress reports, and prompt responses to change order requests can go a long way in preventing misunderstandings and keeping the project on track.
Effective change order procedures arent about stifling flexibility. Theyre about managing change in a controlled and predictable manner. Theyre about protecting everyone involved and ensuring the projects success, even when the unexpected happens. So, the next time youre negotiating a contract, dont skimp on the change order procedures. Theyre worth their weight in gold.
Contracts are supposed to be the roadmap for a smooth business relationship, but sometimes, even with the best intentions, disagreements arise. Thats where dispute resolution mechanisms come into play. Think of them as the traffic lights and detour signs that help navigate those unexpected bumps in the road. No one wants to use them, but knowing theyre there offers a sense of security.
Several options exist, each with its own pros and cons. Negotiation is often the first step – a chance for the parties to sit down, talk things through, and hopefully find a mutually agreeable solution. Its the least formal and often the cheapest route, preserving the business relationship in the process. However, it requires a willingness to compromise from both sides, which isnt always present.
When negotiation stalls, mediation can be a helpful next step. A neutral third party, the mediator, facilitates communication and helps the parties find common ground. While the mediator doesnt impose a solution, they guide the conversation and help bridge the gap between opposing viewpoints. Mediation is generally more structured than negotiation, but still less formal than arbitration or litigation.
Arbitration takes things a step further. Here, a neutral arbitrator hears evidence and arguments from both sides and makes a binding decision. This process is more formal, resembling a simplified court proceeding, and the outcome is typically enforceable by law. Arbitration can be faster and less expensive than litigation, but offers less flexibility and control to the parties involved.
Finally, theres litigation – the traditional court process. This is often the most expensive and time-consuming option, involving extensive discovery, formal procedures, and ultimately, a judge or jurys decision. While litigation provides a clear legal framework and the opportunity for appeal, it can also strain relationships and damage reputations.
Choosing the right dispute resolution mechanism depends on the specifics of the contract and the nature of the dispute. Factors to consider include the cost, the speed of resolution, the desired level of formality, and the importance of preserving the business relationship. Often, contracts themselves specify a preferred mechanism, providing a pre-agreed path forward should disagreements arise. Ultimately, a well-chosen dispute resolution mechanism can be the key to resolving conflicts effectively and efficiently, allowing businesses to move forward and focus on what they do best.
Insurance and liability coverage are crucial components of contracts and legal agreements, acting as a safety net for individuals and businesses alike. They allocate risk and provide financial protection against potential losses, fostering a sense of security and encouraging responsible behavior. Think of it like this: you wouldnt drive a car without insurance, right? Similarly, entering into a contract without considering potential liabilities and securing appropriate coverage can expose you to significant financial hardship down the line.
Liability coverage essentially protects you from the costs associated with being held legally responsible for damages or injuries to another party. This can arise from a variety of situations, such as negligence, breach of contract, or product defects. For example, if a customer slips and falls in your store due to a wet floor, they could sue you for medical expenses and lost wages. Liability insurance would cover these costs, preventing you from having to pay out of pocket.
Within contracts, insurance provisions often specify the types and amounts of coverage each party is required to maintain. This helps to ensure that all parties are adequately protected in case something goes wrong. These clauses can also outline who is responsible for securing the insurance and who bears the cost of the premiums. For instance, a construction contract might require the contractor to carry liability insurance and workers compensation insurance, protecting both the contractor and the client from potential financial losses.
Insurance isnt just about protecting yourself; its about demonstrating responsibility and building trust. By securing appropriate coverage, youre showing the other party that youre taking the agreement seriously and are prepared to handle potential problems. This can be particularly important in complex business deals where significant financial risks are involved. Imagine partnering with a company that refuses to obtain adequate insurance – youd likely be hesitant to proceed, right?
In conclusion, insurance and liability coverage are essential elements of contracts and legal agreements. They provide financial protection, allocate risk, and foster a sense of trust between parties. Understanding these concepts and ensuring appropriate coverage is in place is crucial for protecting yourself and your business from unforeseen circumstances and potential financial ruin. Its like wearing a seatbelt – you hope you never need it, but youre sure glad you have it when you do.
A contractor[1][2] (North American English) or builder (British English),[3][4] is responsible for the day-to-day oversight of a construction site, management of vendors and trades, and the communication of information to all involved parties throughout the course of a building project.[5]
In the United States, a contractor may be a sole proprietor managing a project and performing labor or carpentry work, have a small staff, or may be a very large company managing billion dollar projects. Some builders build new homes, some are remodelers, some are developers.[6]
A general contractor is a construction manager employed by a client, usually upon the advice of the project's architect or engineer.[7] General Contractors are mainly responsible for the overall coordination of a project and may also act as building designer and construction foreman (a tradesman in charge of a crew).
A general contractor must first assess the project-specific documents (referred to as a bid, proposal, or tender documents). In the case of renovations, a site visit is required to get a better understanding of the project. Depending on the project delivery method, the general contractor will submit a fixed price proposal or bid, cost-plus price or an estimate. The general contractor considers the cost of home office overhead, general conditions, materials, and equipment, as well as the cost of labor, to provide the owner with a price for the project.
Contract documents may include drawings, project manuals (including general, supplementary, or special conditions and specifications), and addendum or modifications issued prior to proposal/bidding and prepared by a design professional, such as an architect.The general contractor may also assume the role of construction manager, responsible for overseeing the project while assuming financial and legal risks.There are several types of risks can occur include cost overruns, delays, and liabilities related to safety or contract breaches.
Prior to formal appointment, the selected general contractor to whom a client proposes to award a contract is often referred to as a "preferred contractor".[8]
A general contractor is responsible for providing all of the material, labor, equipment (such as heavy equipment and tools) and services necessary for the construction of the project. A general contractor often hires specialized subcontractors to perform all or portions of the construction work. When using subcontractors, the general contractor is responsible for overseeing the quality of all work performed by any and all of the workers and subcontractors.
It is a best practice for general contractors to prioritize safety on the job site, and they are generally responsible for ensuring that work takes place following safe practices.
A general contractor's responsibilities may include applying for building permits, advising the person they are hired by, securing the property, providing temporary utilities on site, managing personnel on site, providing site surveying and engineering, disposing or recycling of construction waste, monitoring schedules and cash flows, and maintaining accurate records.[9]
The general contractor may be responsible for some part of the design, referred to as the "contractor's design portion" (JCT terminology).[10]
In the United Kingdom, Australia and some British Commonwealth countries, the term 'general contractor' was gradually superseded by builders during the early twentieth century.[citation needed] This was the term used by major professional, trade, and consumer organizations when issuing contracts for construction work, and thus the term 'general contractor' fell out of use except in large organizations where the main contractor is the top manager and a general contractor shares responsibilities with professional contractors.
General contractors who conduct work for government agencies are often referred to as "builders". This term is also used in contexts where the customer's immediate general contractor is permitted to sub-contract or circumstances are likely to involve sub-contracting to specialist operators e.g. in various public services.
In the United States and Asia, the terms general contractor (or simply "contractor"), prime contractor and main contractor are often interchangeable when referring to small local companies that perform residential work. These companies are represented by trade organizations such as the NAHB.[11]
Licensing requirements to work legally on construction projects vary from locale to locale. In the United States, there are no federal licensing requirements to become a general contractor, but most US states require general contractors to obtain a local license to operate. It is the states' responsibility to define these requirements: for example, in the state of California, the requirements are stated as follows:
With a few exceptions, all businesses or individuals who work on any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the California Contractors State License Board (CSLB) if the total cost of one or more contracts on the project is $500 or more.
In every state that requires a license, a surety bond is required as part of the licensing process, with the exception of Louisiana, where bonding requirements may vary in different parishes. Not all states require General Contractor licenses - these include Vermont, New Hampshire and Maine, among others.
Some general contractors obtain bachelor's degrees in construction science, building science, surveying, construction safety, or other disciplines.
General Contractors often learn about different aspects of construction, including masonry, carpentry, framing, and plumbing. Aspiring general contractors communicate with subcontractors and may learn the management skills they need to run their own company.
Experience in the construction industry as well as references from customers, business partners, or former employers are demanded. Some jurisdictions require candidates to provide proof of financing to own their own general contracting firm.
General Contractors often run their own business. They hire subcontractors to complete specialized construction work and may manage a team of plumbers, electricians, bricklayers, carpenters, iron workers, technicians, handymans, architects and roofers. General Contractors build their business by networking with potential clients, buying basic construction tools, and ensuring that their subcontractors complete high-quality work. General Contractors do not usually complete much construction work themselves, but they need to be familiar with construction techniques so they can manage workers effectively. Other reasons include access to specialist skills, flexible hiring and firing, and lower costs.
A property owner or real estate developer develops a program of their needs and selects a site (often with an architect). The architect assembles a design team of consulting engineers and other experts to design the building and specify the building systems. Today contractors frequently participate on the design team by providing pre-design services such as providing estimations of the budget and scheduling requirements to improve the economy of the project. In other cases, the general contractor is hired at the close of the design phase. The owner, architect, and general contractor work closely together to meet deadlines and budget. The general contractor works with subcontractors to ensure quality standards; subcontractors specialise in areas such as electrical wiring, plumbing, masonry, etc.
The concept of home improvement, home renovation or remodeling is the process of renovating, making improvements or making additions to one's home.[1] Home improvement can consist of projects that upgrade an existing home interior (such as electrical and plumbing), exterior (masonry, concrete, siding, roofing) or other improvements to the property (i.e. garden work or garage maintenance/additions). Home improvement projects can be carried out for a number of different reasons; personal preference and comfort, maintenance or repair work, making a home bigger by adding rooms/spaces, as a means of saving energy, or to improve safety.[2]
While "home improvement" often refers to building projects that alter the structure of an existing home, it can also include improvements to lawns, gardens, and outdoor structures, such as gazebos and garages. It also encompasses maintenance, repair, and general servicing tasks. Home improvement projects generally have one or more of the following goals:[citation needed]
Maintenance projects can include:
Additional living space may be added by:
Homeowners may reduce utility costs with:
The need to be safer or for better privacy or emergency management can be fulfilled with diversified measures which can be improved, maintained or added. Secret compartments and passages can also be conceived for privacy and security.
Home or residential renovation is an almost $300 billion industry in the United States,[5] and a $48 billion industry in Canada.[6][full citation needed] The average cost per project is $3,000 in the United States and $11,000–15,000 in Canada.
Professional home improvement is ancient and goes back to the beginning of recorded civilization. One example is Sergius Orata, who in the 1st century B.C. is said by the writer Vitruvius (in his famous book De architectura) to have invented the hypocaust. The hypocaust is an underfloor heating system that was used throughout the Roman Empire in villas of the wealthy. He is said to have become wealthy himself by buying villas at a low price, adding spas and his newly invented hypocaust, and reselling them at higher prices.[7]
Perhaps the most important or visible professionals in the renovation industry are renovation contractors or skilled trades. These are the builders that have specialized credentials, licensing and experience to perform renovation services in specific municipalities.
While there is a fairly large "grey market" of unlicensed companies, there are those that have membership in a reputable association and/or are accredited by a professional organization. Homeowners are recommended to perform checks such as verifying license and insurance and checking business references prior to hiring a contractor to work on their house.
Because interior renovation will touch the change of the internal structure of the house, ceiling construction, circuit configuration and partition walls, etc., such work related to the structure of the house, of course, also includes renovation of wallpaper posting, furniture settings, lighting, etc.
Aggregators are companies that bundle home improvement service offers and act as intermediary agency between service providers and customers.
Home improvement was popularized on television in 1979 with the premiere of This Old House starring Bob Vila on PBS. American cable channel HGTV features many do-it-yourself shows, as does sister channel DIY Network.[8] Danny Lipford hosts and produces the nationally syndicated Today's Homeowner with Danny Lipford. Tom Kraeutler and Leslie Segrete co-host the nationally syndicated The Money Pit Home Improvement Radio Show.
Movies that poked fun at the difficulties involved include: Mr. Blandings Builds His Dream House (1948), starring Cary Grant and Myrna Loy; George Washington Slept Here (1942), featuring Jack Benny and Ann Sheridan; and The Money Pit (1986), with Tom Hanks and Shelley Long. The sitcom Home Improvement used the home improvement theme for comedic purposes.
Renovation (also called remodeling) is the process of improving broken, damaged, or outdated structures. Renovations are typically done on either commercial or residential buildings. Additionally, renovation can refer to making something new, or bringing something back to life and can apply in social contexts. For example, a community can be renovated if it is strengthened and revived. It can also be restoring something to a former better state (as by cleaning, repairing, or rebuilding). Renovation is very common in some places. For example, there are more than twenty thousand home improvement projects every year in Hong Kong, affecting more than a million residents[1] (population of HK is around 7.5 million in 2023).[2]
The building renovation process can usually, depending on the extents of the renovation, be broken down into several phases. The phases are as follow.[3]
Projects involving renovation require not just flexibility, but a plan that had been agreed upon by multiple parties. The planning process will involve feedback from financial investors of the project, and from the designer. Part of planning will also entail the collection of data for the completion of the project and then the project plan will be revised and given consent before continuing with renovations.[6]
Technology has had a meaningful effect on the renovation process, increasing the significance and strength of the planning stage. The availability of free online design tools has improved visualization of the changes, at a fraction of the cost of hiring a professional designer. The decision regarding changes is also influenced by the purpose of basement renovation [1]. Depending on the significance of these changes a professional may be required, especially if any changes other than cosmetic work (paint or finishes) is required. Many local codes require a professional to complete work in the built environment such as structural changes, new walls, new plumbing, or many others. Doing these changes without hiring a professional can result in health effects, safety concerns, damages, fines, and increased cost due to having to hire a professional after self-work.[7] Most builders focus on building new homes, so renovating is typically a part-time activity for such tradespeople. The processes and services required for renovations are quite specific and, once plans are signed off, building a new home is relatively predictable. However, during renovation projects, flexibility is often required from renovation companies to respond to unexpected issues that arise. Renovations usually require all of the sub-trades that are needed for the construction of a new building.
In case of a so-called "fix-and-flip" (repair and resell) objective, an ROI (return on investment) can result from changes to fix a structural issue, to fix design flow yield,[8] or to use light and color to make rooms appear more spacious. Because interior renovation could change of the internal structure of the house, ceiling construction, circuit configuration and partition walls, etc., such work related to the structure of the house, of course, also includes renovation of wallpaper posting, furniture settings, lighting, etc often times an interior designer is required as well.[9]
Many people renovate homes to create a new appearance. Builders may renovate homes to enhance the home's value as a stable source of income.[11] Homeowners often renovate their homes to increase the re-sale value and to turn a profit when selling. Homeowners may also want to add renovations that make their home more energy efficient, green or sustainable.[12] Also, over time, a homeowner's personal preferences and needs may change, and the home will be renovated for improved aesthetics, comfort, or functionality.
Other types of renovations also can be initiated for similar reasons. The user or owner of a building can change which can effect the needs or wants for the space prompting a renovation. This is becoming more popular as buildings owners are renting or leasing floors or sections of the buildings to companies which have different spacial requirements than the previous users causing needed renovation. Renovations can also occur as companies increase size which could lead to needed additional retail, office, or other types of spaces. Similarly to homes other building owners could also want renovations to increased value, make the building more energy efficient, green or sustainable, or to update the building.[13] Sometimes shopping centres or shops are renovated to raise rent later.
Wood is versatile and flexible, making it the easiest construction material for renovations, and wood buildings can be redesigned to suit changing needs. Few homeowners or professional remodelers possess the skill and equipment that is required to alter steel-frame or concrete structures.
When looking at embodied carbon in building materials wood is often labeled as the most sustainable. This is because it sequesters carbon which if certified sustainably sourced will significantly reduce embodied carbon of buildings. This makes it a low emitting choice for a building material for an overall building and for renovations.[14]
Forest certification verifies that wood products have been sourced from well-managed forests. Most certification programs provide online search options so that consumers can find certified products—the Certification Canada program includes a search option for all of the certification programs that are in use in Canada.[15]
In North America, most structures are demolished because of external forces such as zoning changes and rising land values. Additionally, buildings that cannot be modified to serve the functional needs of the occupants are subject to demolition. Very few buildings on the continent are demolished due to structural degradation.[16]
The Athena Institute surveyed 227 commercial and residential buildings that were demolished in St. Paul, Minnesota, between 2000 and mid-2003. Thirty percent of the buildings were less than 50 years old, and 6% were less than 25 years old. The four top reasons for demolition were "area redevelopment" (35%), "building's physical condition" (31%), "not suitable for anticipated use" (22%), and "fire damage" (7%). Lack of maintenance was cited as the specific problem for 54 of the 70 buildings where physical condition was given as the reason for demolition.[16]
Plastics are extensively used in the construction and renovation industry.[17] Airborne microplastic dust is produced during renovation, building, bridge and road reconstruction projects[18] and the use of power tools.[19] It is also generated by deterioration of building materials[20]
Materials containing polyvinyl chloride (PVC), polycarbonate, polypropylene, and acrylic, can degrade overtime releasing microplastics.[17] During the construction process single use plastic containers and wrappers are discarded adding to plastic waste.[21] These plastics are difficult to recycle and end up in landfills where they break down over a long period of time causing potential leaching into the soil and the release of airborne microplastics.[22][23] Efforts have been made to reduce plastic waste by adding it to concrete as agglomerates. However, one solution for resolving the problem from the large amount of plastic wastes generated could bring another serious problem of leaching of microplastics. The unknown part of this area is huge and needs prompt investigation.[24]
Around twenty percent of all plastics and seventy percent of all polyvinyl chloride (PVC) produced in the world each year are used by the construction industry.[25][26] It is predicted that much more will be produced and used in the future.[25] "In Europe, approximately 20% of all plastics produced are used in the construction sector including different classes of plastics, waste and nanomaterials."[26]
While the type of material used will determine the composition of the dust generated, the size and amount of particulates produced are mainly determined by the type of tool used. Implementation of effective dust control measures may also play a role.
Use of angle grinder is not preferred as large amounts of harmful sparks and fumes (and particulates) are generated when compared with using reciprocating saw or band saw.[27] Angle grinders produce sparks when cutting ferrous metals. They also produce shards cutting other materials. The blades themselves may also break. This is a great hazard to the face and eyes especially, as well as other parts of the body.[28]
Use of power tools can cause adverse effects on people living nearby. Power tools can produce large amounts of particulates including ultrafine particles.[29]
Particulates are the most harmful form (other than ultra-fines) of air pollution[30] There is no safe level of particulates.[31]
Many tasks create dust. High dust levels are caused by one of more the following:[32]
Examples of high dust level tasks include:[32]
Some power tools are equipped with dust collection system (e.g. HEPA vacuum cleaner) or integrated water delivery system which extract the dust after emission.[33][34]
In the US, “About 75% of homes built before 1978 contain some lead-based paint. The older the home the more likely it is to contain lead-based paint. You should assume that any home built before 1978 contains some lead.”[35]
In April 2010 the U.S. Environmental Protection Agency (EPA) required that all renovators working in homes built before 1978 and disturbing more than 6 square feet (0.56 m2) of lead paint inside the home or 20 square feet (1.9 m2) outside the home be certified. EPA's Lead Renovation, Repair and Painting Rule (RRP Rule) lowers the risk of lead contamination from home renovation activities.[36] It requires that firms performing renovation, repair, and painting projects that disturb lead-based paint in homes, child care facilities and pre-schools (any child occupied facility) built before 1978 be certified by EPA and use certified renovators who are trained by EPA-approved training providers to follow lead-safe work practices.[37]
Careful stabilization of any deteriorated (peeling, chipping, cracking, etc.) paint in a lead-safe manner is also encouraged. Through authority vested in the United States Department of Housing and Urban Development (HUD), lead-based-paint removal by dry scraping, dry sanding, torching and burning, the use of heat guns over 1100°F, and machine-sanding / grinding without a HEPA-filtered vacuum or a HEPA filtered dust collection system, is prohibited, as these methods have been proven to produce significant amount of lead dust during renovation, remodeling and painting.[38]
At the end of any remodeling or repainting job, a dust test performed by an independent third-party professional is also required by HUD for "clearance". Lead evaluations are done using a method called X-Ray fluorescence (XRF), which gives a result in 4–8 seconds with a 95% accuracy at the 2-sigma level.
As of 2018[update], there are an estimated 37 million homes and apartments with lead paint in the United States.[39]
Currently, worldwide 38% of emissions and 35% of energy use come from the building sector, including building construction and operation. This means renovations contribute to emissions and energy use of the building sector. These percentages are the largest portion of the total emissions and energy use globally.[40] This makes buildings have the highest potential for decreasing these percentages as well as the largest need to decrease them. Renovations are also one way to do this.
Renovations decrease emissions as instead of demolishing a building just to build a new one the building is reused. Reuse of buildings is not always desirable as it is often pursued to have a building designed for the many individual and unique needs building owners have but it is not always a necessity. Renovations can take a building and make it completely different from the old building just reusing the structure, which is often the largest contributor of embodied carbon to a building. However, in order to be able to do this buildings need to be design durably and re-use. Designing for durability and reuse is designing for new buildings to be "long lasting, use-adaptable, and culturally valuable"[14] to allow for the building to be kept for longer to minimize emissions from a complete rebuild.
Having these ideas in mind while designing new buildings significantly increases the likelihood for renovations to happen.[14] Buildings are more likely to be torn down because they can not accommodate the new desired use then because the structure is failing.[16] Renovations allow old buildings to fit new needs in a way that outputs less emissions than a complete tear down and construction of a new building which is often a feasible option.
Renovation has several effects on economies, including:[41]
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