Large house builders experienced in carrying out extensive building works are well aware of the advantages of entering a construction contract with their contractors and professional consultants and are well versed in what is required in order to do so. However, developers who are less experienced or who are carrying out smaller projects, whether for their own purposes or for an investment, often question the benefits versus costs of doing so.
Why have a contract and what form?
A contract solidifies the relationship between the developer and the contractor or consultant. Both oral and written contracts are valid.
However, oral contracts can be a potential source of misunderstanding since their existence cannot be demonstrated by tangible evidence. Written contracts, on the other hand, record in a set place the agreed terms between the parties which will become useful should the parties need to rely on them in the event of any dispute during or after conclusion of the works.