Design-build projects give a single point of responsibility for both the project's design and construction, in contrast to traditional design-bid-build projects, when the owner enters into separate agreements with an architect for the design services and a contractor for its construction. Among other advantages, this type of contract reduces the costs and time required to get the work completed, as well as the risk of mistakes since everyone involved is on the same page.
But this also means that you as the design-builder will assume more responsibility over the project, therefore you must ensure the contract is written in a way that is not only clear and appropriate for everyone involved, but more importantly, is intended to safeguard your interests. The best way to write a flawless contract is to create a design-build contract template that ensures you cover all important information without exception.
To help you do it properly, we'll go over the essential elements your template must include.
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Essential Elements of a Design-Build Contract Template
When creating your contract template, remember all information must be as detailed as possible. Like with all legally-binding contract documents, any mistakes can lead to disputes and legal repercussions. Let's go over the vital elements you should include when creating your template.
Although it might seem simple and obvious, this frequently overlooked element of construction contracts is necessary to give the agreement legal force and effect. It will be difficult to make the design-build contract stand up in court without the proper date or legitimate signatures on all required documents. Make sure to include full names, addresses, and contact details of all parties involved (designer, builder and project owner)
Scope of Work
The next section of your contract template should describe the services to be delivered in great depth and include detailed information about the quality, materials, grade, and other requirements related to the building of the holdings. Provide any and all necessary labor, materials, tools, and supplies.
Your design-build contract should also specify the project requirements for each phase. These may include mechanical completion dates, inspections, testing, as well as design and engineering packages that should be provided either by the project owner or the contractor.
In the scope of work, write down when the place is substantially complete. Substantial completion is when a project, or a piece of it is ready for use. The property can then be used and occupied by the owner. The final sum due for that project or that part of the project must likewise be paid to the contractor by the owner.
In this section of your contract template, you want to specify dates for the start of construction, the completion of the project, and the contract time. It is also important to make a distinction between workdays and calendar days. It's advisable to specify in the contract that you as a contractor are not liable for the property owner's delays in acquiring any necessary permits, permissions, or easements, or for any other delays brought on by inclement weather. Check out our project schedule example for architects.
Costs & Payment Terms
This section must be as precise and straightforward as possible. There should be no doubt as to the price of the services that are included and the price of services that are provided well before the project's scope. The expenditures that are outlined in the contract price may include overhead expenses, profit margins, transportation, handling, storage, and equipment.
This is also where you must clearly outline the payment schedule, the amount owed, and the general conditions of payment. Don't forget to establish the percentages required as deposit, partial payments, final payment, and guaranteed maximum price.
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Expected Tasks and Obligations
The design-build contract must specify all parties' expected tasks and obligations. For instance, who has the responsibility to handle all equipment delivery and transport scheduling, on-site and off-site management, as well as procurement and fabrication services. Contractors may be required to guarantee that all hired personnel and subcontractors are qualified, properly trained, and equipped for the task they will be doing.
Additional duties can include making sure that facilities' existing structures are shielded from harm. It is also important to determine who has the authority to make decisions once the project has started. This level of clarity on the contract can help reduce tension and confusion during the project.
The project owner may demand for a builder's risk insurance, which covers all losses or damages to property, equipment, or fabrications supplied by the contractor. You might also be required by local law to have insurance that protects against bodily injury, illness or death, property loss or damage, contractual responsibilities, and third-party liability for motor vehicles.
This section of your contract is to provide specifications about how any desired changes will be notified to the general contractor, together with any costs associated with a change order and the time frames within which they can be made. You should also clarify that if either party decides they wish to break the agreement, they may do so only after submitting a written document that has been accepted by all parties and signed in accordance with the original agreement's formalities.
Use Our Free Contract Templates for your Professional Services
Drafting your own contract template might be a daunting task, especially if you're not entirely familiar with the structure. Luckily you don't have to do it yourself. To save you time and skip the headache, Bonsai offers you free architecture contract templates especially designed for contractors which you can fully customize to fit your business' needs.
All of our templates are legally reviewed by a contract attorney and thousands of professionals in the construction industry, so you can be sure your company will be protected. Plus, we help you streamline all the formalities by sending the contract online through a secure link and requesting a legally binding e-signature. You will receive a notification as soon as your client receives and signs the contract.
Bonsai helps you save time to focus on your passion, not your paperwork. Start today!