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Project management

Reading the construction contract before the job starts

By Review.LivePublished 3 min readHow we write

The consultant returns your second progress claim without certifying it for payment. The contract required an updated schedule with every payment application, and none was attached. The requirement sat in the supplementary conditions, which nobody on the site team had opened.

Tall stacks of paper documents and file folders, flagged with yellow sticky tabs, fill an office table.
Photo: Wesley Tingey on Unsplash

Contracts are often read closely by whoever signs them, then filed. The clauses that bind the site team — notices, schedule submissions, payment applications, warranty — are spread across the agreement, the general conditions, any supplementary conditions and the specifications. Missing one rarely matters on the day; it matters months later, when a claim, a payment or a warranty call depends on it.

Build a one-page contract summary

  1. Collect every document the agreement lists as part of the contract, including addenda and amendments.
  2. Scope and schedule: completion date, milestones, what the schedule must contain and how often it is updated, and any limits on access or working hours.
  3. Notices: every clause requiring written notice — of a change, a delay, a claim, a concealed condition — with its time limit, form and recipient. See giving notice.
  4. Changes: who may instruct, sign and price a change, and whether you must proceed while one is disputed.
  5. Payment: application dates, required attachments, payment periods and the holdback or retainage.
  6. Warranty and closeout: what starts the warranty, how long it runs, and the documents closeout requires.
  7. Mark what you cannot interpret with confidence, send it to your company's contracts lead or legal adviser, and write the answer on the summary.

Statutes can also set payment deadlines, holdback and lien rights where the project is. In Alberta, for example, the Prompt Payment and Construction Lien Act requires owners to pay a proper invoice within 28 calendar days of receiving it, or give notice of dispute within 14 calendar days; Government of Alberta projects fall under the Public Works Act instead.

Common mistakes

  • Reading the agreement and skipping the supplementary conditions and specifications.
  • Assuming this contract's notice periods match the last job's.
  • Treating your own reading of an unclear clause as settled.

Checklist

Your contract summary shows

  • Completion date, milestones and schedule requirements
  • Every notice: trigger, time limit, form, recipient
  • Who can instruct, sign and price a change
  • Payment dates, attachments and holdback
  • What starts the warranty, and how long it runs
  • Clauses sent for interpretation, with the answers

Check your understanding

Why should the superintendent, and not only the project manager, know the notice clauses?

Show the answer
The events that trigger notice — a concealed condition, a verbal instruction, a stoppage — happen on site, often when the project manager is elsewhere. A superintendent who knows the time limits flags the event and records the facts the same day, while there is still time to give notice. Waiting for the next office visit can use up the notice period.

Sources

  1. Prompt payment rules for construction industryGovernment of Alberta · Alberta, Canada · accessed

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