What should be included in a construction contract?
A sound residential contract states the parties, a detailed scope, allowances and exclusions, price and payment schedule tied to progress, schedule expectations, the change order process, insurance, permits, cleanup and warranty terms.
A contract's job is to make expectations explicit while everyone is still on good terms. The following elements do most of that work.
Parties and identification: legal business name, address, contact information, and the contractor's Massachusetts registration and license information.
Scope of work: specific enough that a stranger could read it and know what's included — room by room, trade by trade, including demolition, disposal and protection.
Allowances and specifications: named products where decided, dollar allowances where not, with clarity on whether allowances cover material only or material plus labor.
Exclusions: what is deliberately not included. This section prevents more disputes than any other.
Price and payment schedule: total contract price and payments tied to defined milestones or completed progress rather than dates alone. Massachusetts law addresses deposits and payment terms in home improvement contracts, so verify current requirements through the Commonwealth's consumer affairs resources.
Schedule: anticipated start and substantial completion, plus how weather, permitting, long-lead materials and owner decisions affect it.
Change orders: a written process requiring your approval before extra work proceeds, with pricing method stated.
Permits and inspections: who applies, who pays, and which approvals are required.
Insurance: liability and workers' compensation coverage, with certificates provided.
Warranty and completion: what's warranted and for how long, how the punch list is handled, and what constitutes completion.
Before you sign
Read the whole document, including anything referenced but attached separately. Ask the builder to explain any clause you find unclear — that conversation is itself a test of the relationship.
If a proposal or contract leaves you uncertain, Northline reviews contractor scopes and proposals for homeowners as a consulting engagement, including on projects we're not building.
