A contractor agreement is an agreement for work between a company or an individual and a contractor. The contractor agreement outlines specifics that include: work to be done, price, payment schedule and other terms and conditions.

What must a proper contractor agreement include and what are the pitfalls?

A proper contractor agreement both leaves no room for misinterpretation and saves both parties headaches down the line. The main clauses that a proper contract are:

1. Names – Names of the both the hiring party and the contractor.

2. Work Scope – This covers the description of the work that needs to be completed by the contractor.

3. Contract Price – This clause lists the monetary compensation for the contractor in return for completing the tasks as detailed in this agreement.

4. Payment Schedule – Payment schedule is outlined as agreed upon by the parties.

5. A general provision clause – This clause covers who is responsible for provision of materials, workers, permits and cleaning of trash and debris from the premises. Either the contract will state that the hiring party will remit payment to the contractor upon presentation of the invoices or that the total price will cover all provisions.

6. Special Conditions – Any other agreed upon special conditions.

7. The agreement cannot be changed or altered without a written agreement between the parties.

The most common pitfalls and how to avoid them?

It is prudent for both parties to ensure that the written document matches what was promised verbally.

The most common pitfalls are as follows:

1. Using a handwritten agreement that contains errors and is incomplete.

2. Using a free agreement downloaded from the Internet that is both incomplete and contains errors.

3. Relying on verbal promises that are not included in the contract. Individuals may forget or misinterpret a verbal communication. A signed agreement that can be referred to resolve this issue.

Is a contractor agreement an absolute must?

Yes, a contractor agreement is an absolute must to ensure maximum legal protection for both parties. This ensures that both parties live up to their commitments under the agreement and leaves no room for misinterpretation. Furthermore, a signed binding contract allows for recourse in case of disagreement. Not having a signed contract increases the chances for a mischief due to the lack of a legal deterrent. It is always wise to err on the side of caution in all matters dealing with money.