No matter what type of construction agreement you’re negotiating, contracts are often long and complex documents with a lot of legal jargon. When you’re dealing with so many complex details, it can be easy to make mistakes or overlook important clauses. Construction contract AI technology can help make the contract process easier for everyone involved.
Contracts can take hours to read through and understand. This is one area AI contract review technology can help. Construction teams can avoid unexpected legal costs by reviewing contracts with AI, reducing the risk involved with a construction project. AI contract review technology can scan these documents, identify the most important provisions, and compare them to the client’s needs. It then highlights any inconsistencies or issues that need to be addressed before signing the document.
Getting things right at the outset will save you from potential problems later in the process. This includes a well-defined scope, clear payment terms, construction scheduling, and payment schedules. To mitigate costly future repercussions, here are some tips for executing a successful construction contract.
Define the Scope of Your Project Early On
One of the most important steps to signing a successful contract is to take the time to carefully define the scope of your project right at the beginning. All critical details and specifications outlined in the contract will include the amount of design and construction drawings, the materials that will be used, and the project’s scope of work.
A thorough description of the project scope will enable you to clearly specify the project’s objectives and deliverables and help stakeholders understand what they will receive in return for their investment. It will also help you head off potential problems or issues that may arise.
Take Your Time
The more complex the project, the more time you’ll need to spend drafting a contract. If you’re working on a simple single-phase renovation project, you may be able to complete the entire contracting process in a matter of days. However, for larger projects, you should allow at least a month.
When deciding how long you will spend drafting your contract, you need to factor in the number of stakeholders involved in the project, their availability, and the complexity of your project. It’s also a good idea to give yourself some extra time to account for any potential delays.
Don’t Make Unrealistic Promises Up Front
While you may be excited about the project and eager to get things started, you don’t want to make unrealistic promises, such as agreeing to meet an early completion date or guaranteeing that you will only use specific materials.
If your project is scheduled to last six months, then agree to complete it within six months. While you should always be optimistic while working on a project, it’s important to be realistic as well.
Stay on Schedule and Monitor Quality
Once you’ve signed the contract, it’s important to be vigilant about managing the project’s schedule and quality. This starts with having a clear understanding of the project’s scope, objectives, and deliverables, and holding your contractor accountable to those terms. It’s also a good idea to monitor your contractor’s performance on a regular basis, and if you see issues or potential problems, address them as soon as possible.
Identify Potential Risks
Potential risks include unforeseeable issues such as weather conditions and union issues. Other risks include increased costs for materials and poor site conditions. According to statistics highlighted in The Economist, between 25% and 50% of construction costs can be attributed to waste and inefficiencies in labor and material control. Properly identifying and managing construction risks are key to completing successful and profitable projects.
There’s a reason why AI contract review technology is an emerging field that has been making waves in the construction industry lately. It can analyze contracts in a fraction of the time that it would take for a human to do so and provides more accurate results. AI contract review technology can help construction companies save time and money by automating analysis for contracts and providing recommendations.
Construction contracts can be challenging and complex to successfully navigate. However, by following these tips, the negotiation process is more efficient and accurate. This will help to avoid costly future repercussions and schedule delays. BlackBoiler’s AI reviews and marks up contracts in minutes based on your historically negotiated contracts and your company standards. Request a demo today.